Are you a shareholder or director? Understanding your rights and obligations is essential to maintaining strong business relationships and avoiding costly disputes.
Even the most successful businesses can be derailed by disagreements between shareholders. Conflicts often stem from unclear expectations, misaligned goals, or a lack of transparency. Without proper planning, these issues can quickly escalate into legal disputes that harm the business and its stakeholders.
The most effective way to avoid shareholder disputes is to establish clear rules from the outset. A well-drafted shareholder agreement is critical and should cover:
Equally important are good communication and transparency. Regular updates, open dialogue, and shared understanding of company performance can go a long way in preventing conflict.
Shareholders have important rights under the Corporations Act 2001 (Cth). For example, under Section 247A, a shareholder may apply to the court for access to company books, provided they act in good faith and the inspection is for a proper purpose. This right helps shareholders ensure accountability and transparency within the company.
If you are worried about your rights or can see potential conflicts emerging, it’s best to seek legal advice early. Taking proactive steps can often resolve issues quickly and preserve valuable business relationships.
At Argon Law, we help shareholders and directors protect their interests, prevent disputes, and resolve them when necessary. Whether you need assistance drafting a shareholder agreement, understanding your legal rights, or navigating a dispute, we are here to support you.
Let us help you avoid disputes before they start.
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