Shareholder and Partnership Dispute Lawyer Edmonton

practice areas Shareholder and Partnership Dispute Lawyer Edmonton

For many years, the team of experienced lawyers at Taurus Law has represented partners and shareholders in business disputes. Indeed, our law firm provides practical legal strategies to resolve disputes effectively and authoritatively advocate for our clients when their cases proceed to court.

Our litigators have acted in Alberta and other jurisdictions for both small and mid-sized limited liability partnerships and joint ventures.

Shareholder and Partnership Disputes

Various disputes involving partners or shareholders can arise in different contexts. Thus, it’s crucial that the parties involved understand their rights and legal options for resolving disputes before taking their conflicts to court. In cases where partnership or shareholder disputes can’t be resolved through mediation, negotiation, or arbitration, proceeding to court trial is the only option.

Shareholder Disputes

In Alberta, corporations are formed at either the provincial or federal level under the Business Corporations Act. Such an organization is often considered a separate legal entity from its stakeholders, particularly the shareholders. As such, disagreements between a company and its shareholders can lead to legal disputes.

Operational matters and shareholder agreements can lead to various issues between shareholders. These issues include:

• Share purchase agreements and share buyouts
• Share classes and valuation
• Corporate leadership and organizational structure
• Business closure
• Business opportunities
• Circumstances under which majority shareholders oppress minority shareholders
• Breach of officer’s or director’s financial duties

It’s important to resolve these conflicts before they disrupt company operations. Luckily, an experienced lawyer can help minimize the impact of partnership disputes, shareholder conflicts, and other related issues.

At Taurus Law, we understand that every shareholder has equal rights to know their company’s affairs and financial status. When shareholders have a suspicion about mismanagement or any other issue by a shareholder or administration, it can lead to complex disputes. Such disputes are also known as ‘shareholder oppression applications’ and can strain the relationship between principal or majority shareholders and the company.

Additionally, we know that shareholder agreements outline a clear dispute-resolution process that must be followed when shareholder disagreements occur. In the absence of a shareholder agreement, the dispute will need to be resolved through mediation, arbitration, or even litigation in a federal or provincial court.

While there’s no obligation to submit to arbitration in the absence of a shareholder dispute resolution agreement, Alberta courts recommend that organizations prioritize alternative dispute resolution methods.

Our skilled lawyers can help resolve disputes without litigation. For instance, we can facilitate the process of amending a shareholder agreement to address the issues that could be causing a dispute. When litigation is necessary, we will provide the legal support and representation you need to take the case to court. Here is the legal relief sought by shareholders who can’t resolve their disputes through mediation or arbitration.

Oppression Remedies

If corporate stakeholders act in an abusive, prejudicial, or unfair way, this conduct can be legally considered as ‘oppression.’ The affected stakeholders may seek oppression remedies under Alberta’s relevant business corporation laws.

Some of the actions that may constitute oppressive conduct include:

• Withholding company financial disclosures from a group of shareholders
• Discriminatory or prejudicial conduct, particularly by the majority group to the minority shareholders
• Fraudulent corporate records or financial statements
• Conflict of interest arising from corporate transactions
• When a company refuses to organize an annual general meeting
• Efforts to prevent certain shareholders from attending an annual general meeting

Alberta courts have wide discretion to order an oppression remedy that best matches the specific circumstances of a case. For instance, the court may order the replacement or removal of directors, compensation for oppressed shareholders, corporate dissolution, and more. While oppression orders are often sought by shareholders, they are also available to officers, directors, and other stakeholders.

Derivative Actions

A derivative action is a legal action initiated by a complainant, often a shareholder or a company director, on behalf of a corporation. This action is taken when the company fails to enforce its legal rights, causing harm to its stakeholders. The complainant applies to start the derivative action because the corporation hasn’t defended itself against legal action.

The derivative action can target anyone owing a duty, right, or obligation to the company, including shareholders, the company’s directors, and officers. It’s essential for holding individuals or entities accountable when they harm the corporation through negligence, breach of duty, or other wrongful acts.

Alberta’s business corporation laws provide that the complainant must apply to a court for permission to start derivative actions. Before granting permission for a derivative action, the court should be satisfied that the complainant made reasonable efforts to get the corporation’s directors to defend the legal proceeding in question.

Additionally, the complainant must have given notice of their application for permission to launch a derivative action to the corporation. Lastly, the complainant must be acting in good faith and the court believes it’s in the corporation’s best interests for that legal proceeding to be defended. Our experienced lawyers can help handle the entire legal process and ensure your interests are protected.

Partnership Disputes

A dispute within a joint venture or a partnership can potentially disrupt the day-to-day operations of a business. If not addressed discreetly and quickly, it may have a long-term impact on the venture’s reputation and the confidence of its partners.

An unresolved partnership disagreement can also threaten the viability of the business itself. Partnership disputes can arise from different circumstances, such as:

• Breach of a partnership agreement
• A buy-sell partnership agreement
• Fraudulent activities
• Termination of a partnership
• Staffing
• Conflict of interest between personal interests and business interests or duties

There are many other issues that can lead to disagreements between partners. These issues often arise from the implementation of a partnership agreement. Regardless of the nature of your business relationship or the extent of the partnership agreement violation, our lawyers can help you resolve the dispute. Also, we have extensive experience in handling litigations involving any form of partnership dispute.

While Alberta’s Partnership Act doesn’t offer a clear process for resolving a partnership dispute, partners involved in a business dispute can seek resolutions from the court. These resolutions include damages for the financial loss associated with the dispute and the appointment of a receiver who can take over the venture’s operations and asset liquidation.

A court can also order a partnership dissolution, buyout by a group of partners (or an individual), or audits to trace the partnership funds. Remember, any partner’s personal liability majorly depends on their level of involvement in the venture’s management and the nature of the partnership.

For instance, a limited liability partnership provides better protection for each partner than a general or limited partnership.

Contact Us

At Taurus Law, we understand the complexity of business disputes, particularly shareholder and partnership disputes. Also, we understand the internal structures of businesses and the disagreements that often arise. Our law firm has a team of litigators with considerable experience in facilitating negotiations for companies to help resolve partnership disputes and other related issues.

Additionally, we have decades of experience in helping corporations, partnerships, and other business ventures take the right legal actions to address partnership disputes and other related disputes. Our litigators have successfully represented company owners, shareholders, and business partners for many years.

We aim to offer practical advice and results-oriented legal representation in time-sensitive matters involving business ownership and disputes. Whenever there’s a need for immediate legal assistance, schedule a consultation and discuss your dispute with an expert. Even when your case proceeds to court, we will be ready to help take decisive action to protect your business and personal goals.