Shareholder & Partnership Disputes
Not getting along with your partners or co-shareholders?
Is your business in limbo because you can't agree on certain decisions which need to be made?
Is your partner or co-owner no longer acting in the best interests of the business?
Are you having trouble communicating with your partner?
Are you and your partners' direction for your business moving apart?
Partnerships don't have to be sinking ships however if you are having any of these problems then typically it's only a question of time before something has to be done to either dissolve the business or have the partners or owners sell their share in the business.
If you already have a partnership or shareholders agreement then it is more than likely a course of action will already be provided for in the agreement. You will still need advice however on what your rights and obligations are in relation to the agreement.
If you don't have such an agreement then you will have to either:
- reach an agreement with your co-owners to sell your share / buy out their share
- dissolve or wind up the business and appoint a receiver / liquidator
- split the business assets and goodwill
We can quickly assess your position to provide you with advice on what course of action will be best for you.
Reaching an agreement is often the best way out of a business owner's dispute however if it turns out you are unable to reach an agreement then some of the following actions may need to be taken:
Actions for dissolution
There are numerous circumstances and ways in which a partnership can be dissolved. The timing of the dissolution will also be relevant as it may determine who is entitled to the various assets of the business.
Declarations and Injunctions
A partner or partners may require the intervention of the court, particularly for declaratory relief in the form of orders to confirm termination of a partnership or if certain assets of the partnership are under the control of a particular partner or partners injunctions to prevent the dissipation of partnership property.
Partners are subject to fiduciary duties to each other and have a right to share in the profits of the business. If partners do not properly account for the profits of the business then it may be possible to have the court require a partner to account for those profits.
It may be more practical to have the assets of the partnership sold rather than having a physical split of the assets. Alternatively it may be necessary to order the sale of the business assets to satisfy its debts. An independent receiver and manager may be appointed to effect such a sale.
Receivers and Managers
Generally a receiver will only be appointed after an order of dissolution has been made. A receiver may be an acting partner or outsider, depending on the circumstances. The effect of an order appointing a receiver is to vest the partnership property in the receiver who will then control the business with a view to a collection of its assets and payment of its debts. If an independent receiver is appointed however you will lose control of the business.
[contact-form-7 id="130" title="Contact form 1"]