Disputes can arise from anywhere in a business, posing varying threat levels to an organization. One of the most challenging dispute types is those arising from shareholder issues. They can happen because of complex and unique circumstances, often causing complications requiring equally intricate remedies.
Fortunately, these issues can be foreseeable, allowing the organization to prepare before the disputes happen. One of the most effective ways to do so is by addressing these issues in the shareholders’ agreement, such as the following:
- Voting regulations among all shareholders – Having fair guidelines for voting can help minor and major shareholders exercise their rights proportionate to their stake in the business. These specifications can include provisions addressing ties and other share-related concerns.
- Share transfers – Reasonable limitations on transferring shares can help shareholders keep track of what they own and operate accordingly.
- Dispute resolution options – Some agreements may have clauses indicating what viable remedies, such as mediation and other options, can help resolve shareholder conflicts.
Aside from addressing these issues in the agreement, other measures, such as efficient recordkeeping, documentation, and communication, can help prevent disputes. By maintaining best practices, shareholders can stay aware of any changes in the company.
Preparing for the worst
Severe disputes and conflicts among shareholders can jeopardize a business’s stability and security, making it crucial to consider and adequately prepare for the worst scenarios. Legal counsel can also help, allowing organizations to update the shareholders’ agreement if necessary, including provisions to address issues that can pose risks over time. Taking these measures might seem tedious, but they can be vital, depending on the situation and the nature of the business.
