Company, director and partnership dispute barrister advice

Disputes between company owners, directors, shareholders or business partners can threaten the management, finances and future of a business. Early advice can help identify the parties’ legal rights and whether the relationship can be repaired, restructured or brought to an orderly end.

Barristerly provides a straightforward way to obtain focused online advice from an experienced Public Access barrister about company, director and partnership disputes in England and Wales.

The barrister can help you understand the company or partnership documents, assess the strengths and weaknesses of your position and decide what practical steps to take next.

Company, director and partnership disputes we may be able to help with

Shareholder disputes

Shareholder disputes may arise where the owners of a company disagree about its management, finances or future direction.

Advice may cover:

• the rights attached to particular shares;

• voting rights and decision-making;

• disputes about dividends;

• access to company information;

• exclusion from management;

• dilution of a shareholder’s interest;

• allotment, transfer or sale of shares;

• compliance with shareholders’ agreements;

• rights under the articles of association;

• alleged agreements or understandings between shareholders;

• disputes about the value of shares; and

• possible exit or buyout arrangements.

Company control and management

Disagreement about who controls a company can prevent important decisions from being made and damage the business.

A barrister may advise on:

• the respective powers of shareholders and directors;

• board and shareholder voting;

• the validity of company meetings and resolutions;

• quorum requirements;

• appointment and removal of directors;

• authority to act for the company;

• disputes over bank accounts or financial control;

• the issue or transfer of shares;

• deadlock between equal shareholders;

• compliance with the company’s articles; and

• applications for urgent court relief.

Directors’ duties

Company directors owe statutory and other duties to the company. A dispute may arise where a director is alleged to have acted for an improper purpose or placed personal interests ahead of those of the company.

Advice may concern:

• the duty to act within the director’s powers;

• promoting the success of the company;

• exercising independent judgment;

• reasonable care, skill and diligence;

• conflicts of interest;

• personal benefits from third parties;

• interests in proposed or existing transactions;

• misuse of confidential information;

• diversion of business opportunities;

• competing businesses; and

• the remedies available for breach.

A claim for breach of directors’ duties will ordinarily belong to the company rather than an individual shareholder. The correct claimant and procedure must therefore be identified before action is taken.

Misuse of company money, assets or opportunities

A director, shareholder or employee may be accused of using company resources for an unauthorised purpose.

Advice may cover:

• unauthorised payments or transfers;

• personal use of company money or property;

• diversion of customers, contracts or opportunities;

• undisclosed commissions or benefits;

• excessive remuneration or expenses;

• transactions with connected persons;

• disposal of company assets at an undervalue;

• repayment and restoration of company property;

• accounts of profits;

• injunctions to prevent further dealings; and

• preservation or recovery of company assets.

Unfair prejudice and minority shareholders

A shareholder may be able to bring an unfair-prejudice petition where the company’s affairs have been conducted in a way that is unfairly prejudicial to that shareholder’s interests.

Advice may concern:

• exclusion from management in a quasi-partnership company;

• diversion of business or assets;

• excessive remuneration paid to controlling shareholders or directors;

• failure to pay dividends;

• dilution of a minority shareholding;

• issue or transfer of shares for an improper purpose;

• breaches of the articles or shareholders’ agreement;

• failures to provide information;

• breakdown of mutual trust and confidence;

• whether the conduct is both prejudicial and unfair;

• valuation of the shareholder’s interest; and

• the remedies the court may order.

A common remedy is an order requiring one shareholder’s shares to be purchased, but the appropriate order will depend on the particular circumstances.

Derivative claims

Where a wrong has been done to the company, a shareholder may in some circumstances seek permission to continue a claim on the company’s behalf.

A barrister may advise on:

• whether the alleged wrong was committed against the company;

• breach of duty, negligence, default or breach of trust by a director;

• whether the company itself is likely to pursue the claim;

• the shareholder’s standing to bring a derivative claim;

• the court’s permission procedure;

• ratification by shareholders;

• whether another remedy would be more appropriate; and

• the potential costs and benefits of the proposed proceedings.

Removal, resignation and appointment of directors

Disputes may arise when shareholders seek to remove a director or when a director resigns but remains a shareholder, employee or creditor.

Advice may cover:

• the procedure for removing a director;

• notice and meeting requirements;

• the director’s right to make representations;

• the interaction between company law, the articles and any shareholders’ agreement;

• termination of employment or a service agreement;

• resignation from office;

• restrictions after departure;

• continuing share ownership;

• repayment of money owed to or by the director;

• Companies House filings; and

• claims resulting from an invalid or wrongful removal.

Removal from office as a director does not necessarily end the person’s employment, shareholding or contractual rights.

Shares, investments and business ownership

Disagreement may arise about who owns an interest in a company or the terms on which money was invested.

A barrister may advise on:

• legal and beneficial ownership of shares;

• promises to allot or transfer shares;

• nominee shareholdings;

• oral or informal investment agreements;

• whether money was an investment, loan or gift;

• pre-emption rights;

• restrictions on transferring shares;

• compulsory-transfer provisions;

• good-leaver and bad-leaver clauses;

• share valuation;

• rectification of the register of members; and

• recovery of an investment.

Company loans and directors’ loan accounts

Money paid into or withdrawn from a company may be characterised differently by the parties.

Advice may cover:

• whether a payment was a loan, investment, salary, dividend or capital contribution;

• repayment terms;

• interest;

• directors’ loan accounts;

• disputed withdrawals;

• loans between related companies;

• guarantees and security;

• set-off and counterclaims;

• the effect of insolvency; and

• proceedings to recover money due.

Dividends and distributions

Disputes may arise about whether shareholders are entitled to receive dividends or whether payments made by the company were lawful.

Advice may concern:

• the declaration and payment of dividends;

• rights attached to different classes of shares;

• available distributable profits;

• unequal or selective payments;

• disguised distributions;

• recovery of unlawful distributions;

• directors’ responsibility for authorising payments; and

• whether a failure to pay dividends forms part of wider unfairly prejudicial conduct.

Shareholders’ agreements and articles of association

The rights of shareholders and directors may be governed by several documents, including the articles of association, a shareholders’ agreement and investment documents.

A barrister may advise on:

• the relationship between the different documents;

• voting and reserved matters;

• board composition;

• financing obligations;

• restrictions on competition;

• confidentiality;

• deadlock procedures;

• compulsory share transfers;

• valuation mechanisms;

• rights of first refusal;

• drag-along and tag-along provisions;

• breach and enforcement; and

• exit arrangements.

Partnership disputes

A partnership can arise through an express agreement or, in some circumstances, from the way people carry on business together.

Advice may cover:

• whether a partnership exists;

• the terms of a written or oral partnership agreement;

• the partners’ respective rights and duties;

• management and decision-making;

• entitlement to profits;

• responsibility for losses and liabilities;

• drawings and capital contributions;

• access to accounts and records;

• authority to bind the partnership;

• conflicts of interest;

• competing businesses; and

• exclusion of a partner from the business.

Where there is no comprehensive partnership agreement, statutory default rules may determine the partners’ rights and obligations.

Partnership property and accounts

Disagreement may arise about whether an asset belongs to the partnership or to an individual partner.

A barrister may advise on:

• ownership of business premises;

• equipment, vehicles and other assets;

• goodwill and intellectual property;

• assets acquired with partnership money;

• property held in one partner’s name;

• capital accounts;

• drawings and expenses;

• undisclosed income;

• the taking of partnership accounts;

• recovery of partnership property; and

• distribution of assets following dissolution.

Dissolution of partnerships

A breakdown in the relationship between partners may result in the partnership being dissolved.

Advice may concern:

• whether a dissolution has occurred;

• notice of dissolution;

• dissolution under the partnership agreement;

• expulsion or retirement of a partner;

• continuing use of the business name or assets;

• collection of debts and payment of liabilities;

• completion of existing business;

• valuation and sale of partnership assets;

• distribution of the remaining property;

• responsibility for continuing obligations; and

• court proceedings to wind up the partnership’s affairs.

Limited liability partnership disputes

Members of a limited liability partnership may have rights and obligations under an LLP agreement as well as the statutory framework.

Advice may cover:

• the terms of the LLP agreement;

• management and voting rights;

• profit shares and drawings;

• capital contributions;

• admission, retirement or expulsion of members;

• duties owed by members;

• misuse of LLP assets or opportunities;

• access to financial information;

• deadlock; and

• winding up or restructuring the LLP.

Breakdown of a business relationship

Some businesses are operated through a combination of companies, partnerships, joint ventures and informal agreements.

A barrister may advise on:

• identifying the correct legal structure;

• ownership of business assets;

• rights to income and profits;

• responsibility for business debts;

• access to premises, systems and records;

• use of confidential information;

• diversion of customers or opportunities;

• valuation and buyout proposals;

• negotiated separation agreements;

• injunctions or preservation of assets; and

• whether the business should be sold, restructured or wound up.

What advice can the barrister provide?

Depending on the questions accepted, the barrister may help you understand:

• your rights as a shareholder, director, partner or LLP member;

• the meaning and effect of the relevant business documents;

• whether a director or business owner may have breached a duty;

• whether company or partnership assets have been misused;

• the strengths and weaknesses of your position;

• what financial information or other evidence may be required;

• whether an unfair-prejudice petition or derivative claim may be available;

• the possible remedies, including a buyout, account, injunction or damages;

• whether negotiation, mediation or court proceedings may be appropriate; and

• the practical steps you should consider taking next.

Fixed-fee online company and partnership advice

The Barristerly package costs £750, including VAT, and provides up to two hours of the barrister’s professional time in total.

It ordinarily includes:

• advance consideration of your information;

• review of up to 20 pages of the most relevant documents;

• an online consultation of up to 60 minutes; and

• a short written summary of the principal advice and recommended next steps.

The remaining time is divided between preparation and producing the written summary at the barrister’s professional discretion.

Relevant documents might include the articles of association, shareholders’ or partnership agreement, investment or loan agreement, relevant Companies House records, accounts, resolutions and important correspondence.

Is the fixed-fee package suitable for every business dispute?

The package provides focused advice on defined questions. It does not include a forensic review of company accounts, valuation of shares or business assets, extensive document review, preparation of substantial court documents, the conduct of proceedings or representation at a hearing.

Company and partnership disputes can involve lengthy documents, detailed financial evidence, multiple parties and urgent applications. The barrister may ask you to narrow your questions or documents, decline the instruction or discuss separate terms for additional work.

Where the company or partnership is insolvent or facing a winding-up petition, our Insolvency and Bankruptcy page may be more appropriate.

If company assets are at immediate risk, an important meeting or resolution is imminent, or urgent injunctive relief is required, you should obtain immediate legal assistance and should not rely on the ordinary Barristerly booking process.

Request a company, director or partnership consultation

Choose an available appointment and tell us briefly about the business dispute, the parties involved and the questions you would like answered.

Your request remains provisional until the barrister has completed the necessary conflict and suitability checks and confirmed the instruction in writing.

[Request a consultation]

Barristerly is an independent booking and introduction service connecting clients with participating independent Public Access barristers. Barristerly is not a firm of solicitors or a barristers’ chambers and does not itself provide legal advice.