While shareholders are the owners of companies, they are among the most likely stakeholders to fall into dispute with it, or with the other shareholders or directors. It is an unfortunate fact of corporate life that such disputes can - and frequently do - occur in companies of all kinds, from small family-owned businesses to large public companies. The most common situation is where the company, through its majority shareholders, acts in a manner which is oppressive or in disregard of the interests of minority shareholders. There are other examples too, such as where the directors of a company refuse to register a new shareholder following a share transfer, or where the company refuses to provide information to a shareholder who is entitled to that information. Such disputes are often resolved in-house, but sometimes require legal advice, representation and redress. The Companies Act 2014 contains numerous rules for the protection of minority shareholders.
We specialise in providing that advice and representation, finding the best and most cost-effective solutions depending on the specific circumstances of a case.
At a very basic level, the ownership of shares in a company provides the owner with property rights protected by the Irish Constitution. Beyond that, the rights of shareholders are found in numerous pieces of legislation, hundreds of years of case law, the company's founding documents, share option agreements and in shareholder agreements. The result is that this has become a notoriously complex area of law with many questions still unanswered.
Barristers are normally required to advise on the rights of company shareholders and the options for enforcing those rights. We have developed a strong practice and reputation for advising shareholders in most situations. As with all of our advisory work, our aim is to provide advice which is both technically sound and practically efficient, meaning that we keep your legal costs to a minimum while achieving the best possible result.
Most work in the area of company law is carried out in the High Court. However, our aim is to try and keep cases out of the courts, therefore avoiding the cost and time involved in that process. We will therefore attempt to resolve your case by mediation where possible, by inviting the other party to negotiate a settlement out of court. We can provide the solicitors and barristers required for this. The advantages of mediation are that it is cost-effective and, from our experience, can resolve cases within days where they might otherwise have taken months in court.
Where mediation is not an option then it may be necessary to issue court proceedings. The nature of the court proceedings will naturally depend on the nature of the dispute and your desired remedies. The following is just a sample of the most common kinds of court proceedings in which we have advised and represent company shareholders.
- Cases involving the oppression of minority shareholders or the disregard of their interests by the majority (section 212 of the Companies Act 2014).
- Where the company does acts which are against its own interests (for example where the majority shareholders also control a competitor of the company). Also known as "derivative actions".
- Where the shareholders of a small company have disagreements which lead to a stalemate in the company.
- Inspection of various information and registers maintained by the company where such information is being denied to the shareholder.
- Orders compelling the company's directors to register a new member following a share transfer (section 173 of the Companies Act 2014).
- Remedies against errant company directors.