Corporate Law: Why Your Business Needs a Lawyer for Stockholder Disputes

"Corporate Law: Why Your Business Needs a Lawyer for Stockholder Disputes" Lawyer

~ by Lizzie Weakley ~.

There are a variety of reasons for stockholder disputes. The two most common disputes for small companies arise when stockholders are deadlocked with no majority, and when a minority stockholder believes that the company isn’t being run in its best interests.

The Deadlock

Deadlocks are usually seen in small 50/50 corporations. The partners might not realize it, but in the governing documents of their corporation and stockholders agreement, provisions could be in place in case of a deadlock. Those provisions may well be subject to interpretation. They might involve a buyout, mediation, or even winding up the corporation. These disputes can be resolved either privately or publicly in a court of law. In whatever way they are addressed, you will need the involvement of a seasoned commercial lawyer to advise you on your rights, obligations, and remedies. You’ll want to know your full range of options. If all roads lead to litigation, a trial law firm with a successful history of representing stockholders in disputes should be considered.

Minority Stockholders

Disputes involving minority stockholders often involve allegations of being treated unfairly or oppressively and being squeezed or frozen out. A squeeze is an attempt to get the minority shareholder to sell their shares at a low price. In a freeze, the minority shareholder is treated as if he or she no longer exists. As opposed to the 50/50 corporation, this might be seen in the 51/49 entity. Again, a stockholders agreement might control a situation like this, but according to commercial courtroom attorneys, many small, closely held corporations have no such agreement.

Colorado Law on Minority Stockholder Oppression

Colorado has enacted broad legislation for the protection of minority stockholders. Without those protections, minority shareholders could be at the mercy of arbitrary and capricious decisions by the majority stockholder. The rights of all stockholders are protected, particularly those with a minority of stock in a company. Regardless of which side you’re on, you’ll want an attorney or law firm that can invoke and protect your rights.

It isn’t unusual for minority or majority stockholders to file lawsuits against each other. That involves complex litigation and extensive courtroom experience. You will need a lawyer or law firm that understands deadlocks and stockholder lawsuits and how to effectively resolve them or litigate them. Once that lawsuit is filed, your ability to resolve such a dispute on your own diminishes exponentially.


Corporate Law: Why Your Business Needs a Lawyer for Stockholder Disputes 1

Lizzie Weakley

Meet the Author: Lizzie Weakley

Lizzie is a freelance writer from Columbus, Ohio. She went to college at The Ohio State University where she studied communications. In her free time, she enjoys the outdoors and long walks in the park with her 3-year-old husky, Snowball.

Categories

All Categories

Business Operations

Entrepreneur Interviews

Marketing, Networking, & Social Media

Self Care & Personal Development

Working Moms

Business Software and Technology

Entrepreneurship & Small Business

Organizing Tips

Sales

Career Building

Family Businesses

Inspiration

Starting Your Own Business

Work-Life Balance

Communication

Hiring Help

Management & Leadership

Time Management & Priorities

Women in Leadership

Recent Posts

Business Blogging 101: How to Create and Sustain a Successful Blog

Business Blogging 101: How to Create and Sustain a Successful Blog

For businesses, business blogging is becoming a powerful tool to not only attract and engage new customers but also to build brand authority and ultimately grow your brand.
This comprehensive guide will equip you with the essential knowledge and strategies you need to start and succeed in the dynamic world of business blogging.

How to Protect Your Merchandise From Theft

How to Protect Your Merchandise From Theft

Protecting your merchandise from theft is a critical aspect of running a successful business. In a world where security threats are ever-present, safeguarding your inventory is essential. Not only does it protect your bottom line, but it also ensures the safety of...

Experts You Need to Have at Your Business

Experts You Need to Have at Your Business

In the dynamic world of business, having the right team of experts is not just beneficial; it is essential for success and growth. For female leaders who are carving out their paths in business, marketing, or HR, knowing which experts to have on board can make a...

7 Tips for Asserting Yourself as a Woman in a Medical Workplace

7 Tips for Asserting Yourself as a Woman in a Medical Workplace

As a woman in a medical workplace, you have a lot of responsibility, not just to yourself but to other women who will come along after you. Asserting yourself in your workplace and gaining the respect of other employees and leadership is essential to a successful career. You have worked hard to get where you are, you don’t want to lose momentum.

Continue to grow with online leadership training and more. Follow these tips to assert yourself in the medical workplace.