Shareholder disputes are one of the biggest threats to any business. Internal conflicts can not only disrupt a company's operational activities but also lead to financial paralysis, reputational damage, and ultimately, even company liquidation. Disputes often arise due to dividend distribution, management strategy, violation of minority shareholder rights, or breach of duties by directors. With the development of corporate law in Georgia, dispute resolution mechanisms have also evolved. This includes both litigation and alternative methods such as mediation and arbitration. Specialists on Legal.ge help you manage crisis situations to minimize damage to the business and achieve a fair outcome.
What Does Shareholder Dispute Resolution Service Cover?
Lawyers and mediators on our platform offer a full range of dispute resolution services:
- Negotiation and Mediation: Attempting to reach a consensus at the initial stage of the dispute with the involvement of a neutral mediator, saving time and costs.
- Derivative Suits: Filing a lawsuit against a director on behalf of a shareholder if the director has caused damage to the company (breach of fiduciary duties).
- Expulsion of a Partner: Legal support in the process where one partner's actions harm the company's interests, and their expulsion is necessary based on the Law on Entrepreneurs.
- Exit and Compensation Disputes: Ensuring fair compensation (share value) for a partner wishing to leave the company.
- Deadlock Resolution: Using judicial or contractual mechanisms to restore paralyzed management.
Real-World Scenarios When You Need This Service
Shareholder disputes often arise in the following cases:
- Non-payment of Dividends: When a majority shareholder blocks dividend distribution and diverts funds to increase their own salaries or bonuses.
- Concealing Information: When a director or another partner refuses to provide financial documentation.
- Charter Violations: Making decisions in violation of quorum or procedural rules.
- Misappropriation of Assets: When a partner or director uses company property for personal purposes or transfers it to affiliated persons (Tunneling).