Different Companies and the Right Actions for the lawyers

 

Conflicts can arise in both small and large companies. This can range from conflicts between the company and an employee to conflicts between shareholder and management. It is also possible for shareholders to have serious differences of opinion among themselves.

Conflict between shareholders

In a private or public ltd. company, the shareholders often disagree with each other. One wants a dividend payment, the other prefers to reinvest in the company. One wants to appoint a certain director, the other thinks that is a very bad idea. The use of the Derivative action lawyer happens to be the best in these cases.

If you are a majority shareholder, the problem is often easily solved by allowing you to push decisions through, but what if you are a minority shareholder? What if you can cast fewer votes in the general meeting than those who have a different opinion than you?

Depending on the situation, there are still options. These include:

·         Invoking the invalidity of a resolution of the general meeting of shareholders.

·         Forcing the other shareholder (s) to take over your shares for a certain price.

·         To force the other shareholder (s) to sell their shares to you at a specified price.

Invoking invalidity of the AGM's decision

There are two ways to invoke the invalidity of a resolution of the general meeting of shareholders:

By invoking nullity, by resolutions of other shareholders that is contrary to the law or the articles of association;

By invoking annulment, because the decision of the other shareholders is contrary to the rules for taking decisions, because the decision is against reasonableness and fairness, because the decision is contrary to the rules of the company, because the decision has come about under the influence of a lack of will.

If the conflict between shareholders arises from an invalid resolution, it can simply be invoked. However, if the decision can be annulled, it must be annulled by the judge.

If you feel that invoking the invalidity can be a solution to the conflict between shareholders, it is wise to have this properly investigated. A lawyer is virtually indispensable in this regard, given the complexity of this problem.

Forcing another shareholder to take over a share

With the BV (and with some NV's), a shareholder whose rights have been greatly infringed by one or more other shareholders can oblige the other shareholders to take over his shares. A condition for this is, however, that your rights or interests as a shareholder have been harmed to such an extent that you can no longer reasonably be expected to remain a shareholder. This claim can also be brought against the company itself.

If you cannot reach agreement with the other shareholder (s) on the price to be paid for the shares, the court will call in experts to determine that price. The law provides a number of regulations that these experts must adhere to. Two weeks after the judgment, the shares must be transferred and the purchase price must be paid.

Forcing another shareholder to sell shares

It is also possible in a conflict between shareholders to demand that the other shareholder (s) buy you out. This is only possible if you have at least 1/3 of the issued capital of the shares. In a conflict between shareholders in which a shareholder demands the sale of shares, it must also be substantiated that the other shareholder is damaging or has harmed the interests of the company. Those behaviors must be so serious that this person will remain a shareholder.

Here too, if no agreement is reached with the other shareholder (s) about the sale price, experts will determine that price.

Conflict between shareholders: mutual solution possible?

If a conflict arises between shareholders, you will of course try to resolve it mutually first. In many cases this succeeds because the shareholders do not feel like going to court.

If the conflict cannot be resolved in this way, it is wise to engage a lawyer. Not to take the direct step to court, but to find out exactly where you stand legally. Does going to court make sense? What options do you have? Based on this, constructive negotiation can be started, which often still leads to a solution.

If the conflict between the shareholders has gotten out of hand to such an extent that there is no longer a solution, you must go to court. The law requires a lawyer for this.

Conflict between shareholders - Conclusion

A conflict between shareholders is always annoying, especially if it cannot be resolved by mutual agreement. It makes a difference that the law then offers a number of options to ensure that other shareholders cannot harm your interests just like that. These options range from affecting decisions made to compulsory purchase or sale of shares.

Corporate law can be complex, especially when it comes to disputes between shareholders. It is therefore strongly recommended to engage a lawyer as soon as it appears that a solution is not possible in mutual consultation with other shareholders.