Vancouver Shareholder & Partnership Dispute Lawyers

Unresolved disagreements between shareholders or partners can cause internal discord, disrupt business operations, and damage a company’s reputation. Many of these disputes require swift legal action to preserve stakeholder rights and protect the value of the business.

For over 30 years, the commercial litigation team at Meridian Law Group has represented shareholders and partners in business disputes. The firm’s litigators provide practical strategies to resolve conflict as efficiently as possible and authoritatively advocate for clients when matters proceed to court.

Shareholder Disputes

Shareholder agreements and operational matters can give rise to several issues between shareholders, including:

  • Valuation of shares and share classes;
  • Share purchase agreements and buyouts;
  • Corporate leadership and structure;
  • Business opportunities;
  • Closure of a business;
  • Winding up a corporation;
  • Oppression of minority shareholders by majority shareholders; and
  • Breach of a director or officer’s financial duties.

Some corporate disputes can be resolved without litigation. For example, a shareholder agreement may be amended to address a contentious issue, or the company may buy back a shareholder’s shares to part ways amicably.

When litigation is required, parties may seek legal relief from the court. Most forms of relief sought in shareholder disputes fall within two categories of legal remedy: oppression remedies and derivative actions.

Oppression Remedies

When corporate stakeholders act in an unfair, abusive, or prejudicial way, their conduct may be considered “oppression”. Stakeholders affected by the oppression may seek an oppression remedy under British Columbia’s Business Corporations Act.

What constitutes oppressive conduct depends on the context of each dispute. Some examples include:

  • Prejudicial or discriminatory behaviour by majority shareholders toward minority shareholders;
  • Withholding corporate financial disclosure from a particular group of shareholders;
  • Conflicts of interest, including corporate transactions that are not made at arms-length;
  • The preparation of fraudulent financial statements or corporate records;
  • A refusal by the company to hold an annual general meeting;
  • Attempts to prevent a stakeholder from attending or participating in an annual general meeting; and
  • Majority shareholders acting in a prejudicial or discriminatory manner towards minority shareholders.

Examples of Oppression Remedies

Courts have a broad discretion to order an oppression remedy that best suits the particular circumstances of the dispute. For example, the court may make an order for:

  • The appointment of a receiver to take control of corporate operations or sell assets;
  • The dissolution of the corporation;
  • The sale, issue, or exchange of certain share classes;
  • The removal and replacement of directors;
  • The variation or invalidation of a corporate transaction or contract;
  • Damages to compensate an oppressed party; or
  • An investigation into the oppressive party’s actions.

Oppression remedies are commonly sought by shareholders but are also available to other stakeholders, including directors and officers.

Derivative Actions

Derivative actions are legal actions taken by a complainant (often a shareholder or director) in the name of, and on behalf of, a corporation. The complainant applies to commence the derivative action because the corporation has failed to enforce its legal rights or defend itself against legal action to the detriment of its stakeholders. Derivative actions can be brought against anyone owing a right, duty, or obligation to the company, including shareholders, directors, and officers.

British Columbia’s Business Corporations Act provides that complainants must apply to the court for permission to take a derivative action. The court must be satisfied that:

  • The complainant has made reasonable efforts to get the company’s directors to prosecute o defend the legal proceeding in question;
  • The complainant has given notice of their application for permission to begin a derivative action to the company, as well as any other person the court may order;
  • The complainant is acting in good faith; and
  • The court believes it is in the company’s best interests for the legal proceeding to be prosecuted or defended.

Partnership Disputes

Partners may experience many of the same issues faced by corporate shareholders. Disagreements between partners can arise from the application of the partnership agreement or in the context of the business’s operations. Some common partnership disputes include:

  • Leadership roles and responsibilities;
  • Conflict of interest between a partner’s business duties and personal interests;
  • Misappropriation, fraud, or theft of partnership assets;
  • Division of ownership between partners;
  • Business opportunities to pursue;
  • Staffing; or
  • Dissolution of a partnership and winding up the business.

Remedies for Partnership Disputes

British Columbia’s Partnership Act does not provide partners with the same remedies granted to corporate shareholders under the Business Corporations Act. However, partners can still obtain similar relief in the court, including:

  • Damages for financial losses caused by a partner’s conduct;
  • Appointment of a receiver to take over business operations or liquidate assets;
  • Dissolution of the partnership;
  • Buyout of a partner or group of partners; or
  • Audits and tracing of partnership funds.

A partner’s personal liability depends on the nature of the partnership and the degree of their involvement in the business’s management.  For example, a limited liability partnership offers more personal protection to partners than general or limited partnerships. However, partners in any type of partnership may face liability for their own negligence or illegal conduct.

Contact Meridian Law Group in Vancouver for Experienced Representation in Shareholder & Partnership Disputes

Meridian Law Group understands the complexities of a business’s internal structure and the disagreements that can arise within it. The firm’s experienced litigators address internal conflict by creating strategic legal solutions and taking decisive action in court when needed. Meridian Law Group‘s decades of business law experience provide clients with the confidence that their shareholder or partnership dispute will be resolved swiftly and effectively. 

Meridian Law Group has delivered results for clients in commercial litigation matters since 1988. Located across from the courthouse in downtown Vancouver, the firm serves clients throughout British Columbia, across Canada, and internationally. Call (604) 687-2277 or reach out online to schedule a confidential consultation.