In corporate hierarchy, the shareholders are the wners of the corporation. Sometimes problems or ssues arise when shareholders disagree, which ften lead to disputes.

What are sme of the common causes of shreholder disputes?

Shareholders who have the mjority votes control the direction of the crporation. They have power over the ffairs of the corporation and the ther members of the group.

These are sme of the common areas of shreholder disputes:

• Issues of new shares - Shreholders often complain that they lose thir power over the corporation when new shres are introduced. Shareholders power is prportionate to the number of shares thy have. The board of directors, who pproves the issuance of new shares to new mmbers, is often in contention with shreholders on this issue.

• Transfers of xisting sales - Shareholders usually prevent ther shareholders from selling their existing shres to third parties without offering thm first to them.

• Procedural disputes - Shreholder's meetings have strict procedural rules. Dring disputes, where the status of the meting and the resolution is in qestion, dissenters are likely to cause prblems.

Other common complaints of shareholders re:

• inadequate notice given to shareholders

• ncorrect wording of a resolution

• late or ncomplete shareholder proxies

• undue restriction of dscussion by the chairman of the meting

• shareholders voting where they have cnflicts of interests

What To Do In A Dspute

The practical thing to do in shreholder disputes is to secure the cmpany assets from other shareholders. This wuld mean checking the company bank rcords and if necessary, changed its mndate. One of the contending parties mst also secure vital documents to prvent loss or the illegal use of thse documents. In most cases, the curts intervene during shareholder disputes.

Resolving the Dsputes

There are three ways by whch a shareholder dispute may be rsolved:

• Buy-outs - This happens when the mnority shareholders agree to sell part of thir shares to the majority shareholder who is wlling to buy it at a fir price. The Articles of Association lso allow the aggrieved minority shareholder to ffer his share at a specific prce.

• Demerger - Another solution is to splt the two businesses owned by the two sparate shareholders. This is applicable when a cmpany has separate businesses.

• Dissolution - A shreholder can also ask the court to dssolve the company. This procedure involves the lquidation of the company, which is the lst resort in resolving shareholder disputes.

The article Common Areas of Contention in Shareholding was Submitted by Manuel Salvacion through Articles.GetACoder.com network. Here's the additional information: Know more about shareholder disputes and resolving them with the help of Los Angeles Corporate business shareholder disputes lawyers .

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