Shareholder and partner disputes

Shareholder disputes

The conflict is settled
in the documents
signed beforehand.

A disagreement between shareholders is not an ordinary dispute: both sides run the same company, often with access to the same accounts and the same employees. Every week of deadlock is paid for in lost clients.

The first thing we examine is the shareholder agreement, if one exists. It often contains the mechanism that resolves the conflict without proceedings, and its absence explains most of the files that end up in court.

Without an agreement, the Business Corporations Act offers powerful remedies, including the oppression remedy, which allows the court to make almost any order it considers necessary to rectify an abusive or unfair situation.

Two business partners in disagreement at their office

What we do

Break the deadlock,
then separate cleanly.

Reviewing the agreement

Available exit mechanisms, valuation formula, shotgun clause and the conditions for triggering it. Often the solution is already written.

Oppression remedy

Where a shareholder acts abusively or unfairly disregards another’s interests. The court may order a buy-out of the shares, change the governance or set aside a decision.

Decision-making deadlock

Two equal shareholders who no longer agree. Negotiated solutions, arbitration, appointment of a third decision-maker or, as a last resort, dissolution.

Share buy-out and valuation

Setting a defensible price is the heart of these files. Valuation expertise, minority discount, control premium: each parameter is negotiated.

Urgent measures

Injunction, sequestration, safeguard order where a shareholder is emptying the company, diverting clients or blocking access to the accounts.

Negotiated exit

Most of these files resolve through the departure of one shareholder. Our role is to obtain the best terms and to secure payment.

Services

Oppression remedies
Forced share buyouts
Breaking decision-making deadlocks
Rendering of account

Frequently asked questions

What we are asked most.

What if there is no shareholder agreement?

The Business Corporations Act applies by default. The oppression remedy there is particularly broad: the court may order almost any measure needed to correct an abusive situation, including a forced buy-out of the shares.

Does a minority shareholder have remedies?

Yes, and they are often the most effective. Oppression exists precisely to protect the party without control. A minority shareholder also has a right of access to the company’s books and, in some cases, a derivative action on the company’s behalf.

Can a partner be forced to sell their shares?

Not unilaterally, unless the agreement provides for it or the court orders it under an oppression remedy. That is exactly why exit mechanisms are negotiated before a conflict, not during one.

How long can the company stay deadlocked?

Too long if no one acts. A safeguard order can be obtained quickly where the situation justifies it, and it often shifts the balance enough to make an agreement possible.

Three texts at the core of these files: the shareholder agreement, the shotgun clause, and what your business is really worth, since everything ends as a question of price.