Business Advice

Why Shareholder Disputes Should be Settled Quickly

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Running a business brings with it a lot of responsibilities and hard work and sometimes things go wrong.  Often disputes arise between the directors and shareholders or between the shareholders themselves that can only be settled by consulting commercial lawyers. Commercial Lawyers Perth advise that it is important to try and settle the dispute outside of court because the judge has the power to wind up the business completely if they think this is the only way to settle the dispute.

Consider the case of two or more friends who started a business together and didn’t even think about drafting up an agreement about what would happen if one partner wanted out, or what would happen if one stopped pulling their weight. Often the problem may have been allowed to go on for months or years until bad feeling becomes set like cement and the two cannot work together any more.

The best way to settle disputes is to tackle them when they first arise, rather than letting them get out of hand. Dispute negotiation and good communication between those involved can often resolve the matter. If it does not, mediation with neutral third party to calm tempers and see that justice is done can sometimes bring agreement. When this, too, fails it is time for judicial arbitration. Unfortunately, at this stage the parties have to comply with the judgement passed down, even if it is to wind up the business.