All businesses face conflict, but one of the most potentially damaging types of conflict is a shareholder dispute. Most shareholders want to see their business succeed, and a dispute can disrupt a company’s plan. Although there’s no way to avoid conflict altogether, there are ways to resolve shareholder disputes before they grow and cause real damage. 

Resolve Shareholder Disputes

Examples of Shareholder Disputes

Disputes between shareholders arise for a number of reasons. Some examples of common shareholder disputes include:

  • Disagreements over the direction of the company
  • Conflicts of interest
  • Contractual disputes
  • Compensation disputes
  • Breach of fiduciary duty and other fiduciary conflicts
  • Personal conflicts between shareholders

Once a dispute begins, it can be difficult to find a resolution that all parties agree to. Maybe one party feels that the solution is unfair, or no one involved can come to an agreement. In those cases, it’s best to look at different strategies for resolving shareholder disputes. 

Strategies for Resolving Shareholder Disputes

Shareholder Agreement

A key component of business planning is creating a shareholder agreement. A well-thought out agreement should include what to do in the event of a dispute or give steps toward a resolution. It should encompass different scenarios with a clear path to resolution. The first thing a company should do during a dispute is refer to the agreement.

Change in Directors

Appointing, removing, or adding a director can bring a fresh perspective to the business dispute. Someone without stakes in the disagreement can help to dissolve the conflict or move it in another direction.


Sometimes, hiring a professional mediator may be the only way to find a resolution to the shareholder conflict. A neutral third party with knowledge in business law, such as an attorney, can provide guidance while offering solutions to the dispute. The mediator ensures that communication is effective on both sides of the conflict. 


If one party in the dispute refuses to budge, a buy-out might be the best solution. Also known as business divorces, buy-outs occur when either the company or a single shareholder purchases the shares of the party that’s leaving. Buy-outs are initiated when either the company chooses to purchase the shares of a single shareholder or a single shareholder purchases all shares to control the company. 

Reasons to Avoid Shareholder Disputes

Aside from the stress of a shareholder dispute, there are several reasons that a lengthy dispute is bad for the business. 

  • Disputes distract from business operations.
  • Handling disputes can cost a company or individuals a lot of money.
  • Resolving disputes can take a long time. 
  • Ongoing disputes can sour business relationships. 
  • Successful businesses run smoothly with quick dispute resolution.
  • Disputes can escalate  into a conflict with no solution.  

Can an Attorney Help Solve shareholder Disputes?

When it comes to solving shareholder disputes, your company might need the help of an expert. A business law attorney is an excellent resource for coming up with strategies to avoid disputes and how to solve them. At Atolles Law, S.C., our lawyers specialize in a variety of business law matters and can help you craft a shareholder agreement, mediate your dispute, or help you come up with a solution that favors you and your company. Schedule a consultation with one of our lawyers to go over your business needs today.