Like many companies in Texas, your business may utilize shareholders to forward the company’s financial interests and keep it running smoothly. However, relations between those in charge of a company and the shareholders may not always be positive. At The Jackson Law Firm, we are experienced in helping businesses navigate the complications that can occur when a shareholder dispute arises.
Ideally, shareholders represent a company’s best interests by electing an effective board of directors, who in turn are responsible for company management. According to the Harvard Business Review, shareholders are important company investors, and therefore have an interest in the company’s ability to succeed. As such, they often have the power to change company management by a vote if they feel the current board of directors is ineffective. The opinions of shareholders and company management can often clash, leading to business disputes.
A common misconception is that shareholders are company owners and have all the powers that would be expected of such. This is one misunderstanding that can have shareholders and boards of directors butting heads. Additionally, some shareholders may express concerns that company management is pocketing profits, while boards might feel they are constantly being bullied by their shareholders – even to the point of making decisions they feel are not best for the company.
If you’re experiencing tension with your shareholders, you understand the frustration this causes, particularly if the dispute interferes with the operation of your business. In these cases, an attorney with experience in business law may be able to resolve disputes through mediation or, if necessary, in court. For more information, visit our page on shareholder disputes.