Shareholder Rights

Shareholders almost always set out with the best of intentions but over time relationships can change.

This can be a result of many different factors such as the differing contributions of shareholders or a change in a shareholders’ personal circumstances.

While having differing opinions is never ideal, it is often possible to resolve these issues without having to resort to expensive litigation (going to court). Sometimes the parties have a shareholders’ agreement in place that will provide details of the rights of the shareholders and the process for resolving disputes, but in many instances, this is not the case.

Often shareholders in NZ companies need to be advised of their rights and be guided through a process for one or more shareholders to buy the others out on terms that they all find acceptable. Reaching an agreement on the purchase price for the shares is often a sticking point. Agreeing to obtain an independent valuation of the company can be an excellent starting point.

Other issues that often need to be resolved revolve around non-competition, ownership of intellectual property that one party may have brought to the business.

Where the shareholders are unable to resolve the issues between themselves the involvement of specialist lawyers will often expedite resolution of the issues by bringing an element of independence, not to mention years of experience with NZ companies dealing with many similar issues in the past.

Only in the most serious of circumstances should it be necessary for shareholders to go to court. There are several steps that should be taken before that point to increase the chances of a mutually acceptable and cost-effective resolution. This is the case whether the shareholdings are equal or in minority shareholder situations.

Please get in touch with us today if you want to discuss your shareholder rights as a shareholder of a NZ company, and options for resolution of issues that may have arisen between shareholders.

Contact us to discuss how we can help.