Many companies often need financial assistance when getting started and in order to carry out various business operations. As a result, business owners often utilize shareholders who provide capital to benefit the company while also gaining a say in how to address certain aspects of the business. You may consider the shareholders involved with your company a substantial asset that allows you to achieve your business goals.
Because shareholders do gain a say in certain business operations, the possibility exists that issues between shareholders and yourself or other related parties could arise. Though some conflicts may have simple resolutions, others may present a greater challenge. If shareholders feel that violations of their rights have occurred or that their opinions go unconsidered, serious disputes could take place.
Because shareholders have the ability to voice their opinions on the running of the company, that right typically comes in the form of having the ability to vote on certain business-related topics. Typically, meetings occur in which the shareholders can gain company updates and vote on any presented topics. If shareholders believe that the company has carried out an action that they voted against, or if an action took place that the shareholders had no say in, a dispute could occur.
Lack of information
Shareholders also have the right to obtain and review a variety of information regarding the company’s operations. This information can relate to financial aspects of the business or proposed ventures that the company may consider taking. If shareholders feel that you have not provided them with accurate information or have withheld information, you could potentially face serious issues.
Another duty shareholders have relates to keeping the management of the company in check. If they have questions regarding how the company carried out a certain operation or believe that certain management decisions did not take the best interests of the company into consideration, they have the right to bring up objections.
Though you may hope that you will form a strong connection with the shareholders of your company, disputes can easily take place over a variety of issues. In the event that you cannot easily resolve the conflict, you may find it useful to gain information regarding your legal options for handling shareholder disputes. With the right knowledge, you may have a better chance of effectively addressing company issues and preventing further conflict.