Problems often arise in a business between shareholders. While there are available options before litigation, these issues can oftentimes escalate quickly. If you are an individual working with others who have ownership or equity in a business and are involved in a dispute, it’s important that you understand your rights as a shareholder and your options for legal recourse.
Lawyer Matthew Harris has been working with individuals and businesses throughout the Toronto area for years. He has the necessary insight to guide you and your shareholders in the right direction so that any disputes can be settled as quickly and amicably as possible. He aims to provide high-level legal representation and counsel to businesses throughout the area and protect the professional interests of his clients. His firm, Matthew R Harris Law P.C., is proud to serve both individuals and businesses in Toronto, Ontario, and the surrounding areas of London, Hamilton, or Ottawa. Call today to learn more about how he can help with your situation.
Shareholders’ rights are outlined and protected under common law in Canada. In addition, the applicable Corporations Act as well as a company’s shareholder agreement outline and protect those rights in detail.
Shareholders are entitled to receive the financial statements of the corporation and to examine the books and records at the corporation’s head office. Additionally, shareholders have one vote for each voting share of the corporation he or she holds. If there are any majority shareholders, they will have more control over what happens in the corporation over any minority or silent shareholders. Ultimately, there are three important rights that every shareholder has:
The right to vote at a valid shareholders’ meeting after receiving proper notice and documents.
The right to attend a meeting of shareholders.
The right to accurate and complete information about the affairs of the corporation, including the articles of incorporation and any amendments, the directors’ register, the by-laws, minutes of directors and shareholders meetings, and the financial statements, whether audited or not.
It is not uncommon for disputes to arise amongst shareholders, especially if there are majority and minority groups. The most common shareholder disputes include:
Violation of the shareholder agreement
Breach of fiduciary duty
Forced buyout of shares
Oppression or silencing of the minority shareholders in which the oppression remedy is relief from oppression, as outlined in the Ontario Business Corporations Act
Termination of business relationships
Share price disputes
It’s important to remember that shareholder disputes are not limited to the list above. There are oftentimes many other disagreements that can arise, and if a resolution cannot be reached, litigation may be required.
If you are involved in a dispute with your fellow shareholders, hiring a shareholder dispute lawyer can go a long way towards resolving the issue. As a shareholder, there are a few options available for resolving any dispute that has come up. The most common forms of dispute resolution involve negotiation, mediation, arbitration, or litigation. Generally speaking, litigation is often considered a last resort when all other dispute resolution attempts have failed. Consequently, litigation is on the decline as a form of dispute resolution in Canada. Recent studies have shown that there were roughly 77,345 recorded civil actions from 2019 to 2020 — a fairly significant decrease from years prior.
Navigating shareholder disputes without reliable legal counsel can oftentimes drag out disputes and negatively impact the business. If you’re facing a dispute with shareholders, you need a commercial litigation lawyer who has the necessary experience to advocate for your best interests and help all parties work toward a resolution.
Matthew Harris has earned a strong reputation as a lawyer who can provide reliable legal counsel and guidance to individuals and businesses facing any number of shareholder disputes. His extensive experience and professional approach can help you and your shareholders reach a resolution as quickly and amicably as possible that your business can continue to thrive. If you’re facing a difficult shareholder dispute, don’t face this challenge on your own. Call or reach out to Matthew R Harris Law P.C. today and schedule a case consultation.
Matthew R. Harris knows the laws surrounding shareholder disputes and how best to apply them. He has extensive experience using various forms of dispute resolution, including negotiation, mediation, and arbitration, and will fight vigorously in your best interests. If necessary, Matthew is even prepared to litigate on your behalf. If you are facing a difficult shareholder dispute in Toronto, Ontario, or in the surrounding areas of London, Hamilton, or Ottawa, contact Matthew R. Harris Law P.C. today and schedule a one-on-one case consultation.