LAWYERS NSW
Shareholder Dispute Lawyers
Why Choose Lazarus Legal as Your Shareholder Dispute Lawyer
At Lazarus Legal, we approach shareholder disputes with one priority: protecting commercial outcomes while reducing unnecessary escalation.
Our team understands that these disputes are rarely just legal. They are strategic, financial, and often personal.
How Lazarus Legal resolves Shareholder Disputes
- Review shareholders agreements and company constitutions
- Advise on directors’ duties and shareholders’ rights
- Identify breaches of statutory and contractual obligations
- Develop negotiation and exit strategies
- Represent clients in mediation
- Commence or defend court proceedings
- Pursue or resist shareholder oppression claims
- Structure buy-outs and share transfers
Secure Your Legal Advantage
Mediation Expertise
Many shareholder disputes can and should be resolved without court. We prepare strategically for mediation, ensuring:
- Your leverage is clearly understood
- Your financial position is protected
- Settlement terms are enforceable and commercially workable
A well-prepared mediation can preserve business relationships and avoid the cost and delay of litigation.
When court action becomes necessary, we act firmly and strategically. Shareholder disputes are commonly heard in the Supreme Court and may involve:
- Oppression proceedings
- Injunctions to prevent misconduct
- Orders for compulsory share buy-outs
We focus on efficient litigation, evidence strength, and strong negotiation positioning throughout proceedings.
What Is Shareholder Oppression?
Shareholder oppression occurs when the conduct of a company’s affairs is oppressive, unfairly prejudicial, or unfairly discriminatory towards one or more shareholders.
Under the Corporations Act 2001 (Cth), courts have broad powers to remedy conduct that unfairly harms a shareholder’s interests.
Oppression can arise in many forms, including excluding a shareholder from management contrary to prior understandings, withholding dividends without justification, or denying access to company information.
Importantly, oppression is assessed objectively. It is not enough that conduct feels unfair; it must be legally unfair in the circumstances.
Remedies Available in Shareholder Disputes
Courts have wide discretion to craft appropriate remedies depending on the circumstances. Common remedies include:
- Compulsory buy-out of shares at fair value
- Orders regulating the future conduct of the company
- Injunctions to stop improper conduct
- Setting aside transactions
- Appointment of a receiver or administrator
- Winding up the company (in serious cases)
In practice, many disputes resolve through negotiated buy-outs structured around these potential remedies.
The earlier advice is obtained, the stronger your position in securing a favourable outcome.
Best of the best. Professional, prompt and always offering excellent advice. I’ve used Mark and his team for multiple businesses from a tech start up to more established businesses. Mark has advised on employee contracts, shareholders agreements, trade marks and more. I wouldn’t use any other legal service provider.
Lazarus Legal is amazing. Absolute game changers. A friendly and dynamic team with fabulous offices. Good listeners with genuine knowledge of all sectors. Fast thinkers and really take the time to understand your business. What I love most is they work with and wholeheartedly encourage start ups. Highly recommend. A ++
Mark was efficient, professional and conducted everything in such a timely manner with excellent attention to detail. I was very new to the world of small business legalities and he was patient and took the time to take me through all the finer details to ensure it was clear and I was comfortable. I would highly recommend him!
Shareholder Dispute Scenarios and How Lazarus Legal Would Approach Them
Scenario One — A 25 Per Cent Shareholder Removed From the Board of a Family Company
A shareholder holds twenty-five per cent of a family building company and has worked in the business for eleven years, drawing a director’s salary of $180,000. Following a disagreement about succession, the remaining shareholders pass a resolution removing the shareholder as a director and terminating the employment. No dividend has been declared in the previous six years. The shareholder is offered $95,000 for the twenty-five per cent holding, calculated on net asset value with a forty per cent minority discount, and is told the offer expires in fourteen days.
The removal itself is likely valid, because the resolution had the numbers. The oppression case is built on the combination of factors surrounding it. The shareholder joined a company where the expectation was participation in management and remuneration through employment rather than dividends, which engages the quasi-partnership reasoning in Ebrahimi. The six-year absence of dividends is significant, because it establishes that the shareholding delivered no return except through employment, and the employment has now been removed.
Lazarus Legal would decline the exploding offer in writing without rejecting the concept of a sale, then move immediately to a section 247A inspection to obtain the last six years of financial statements, director remuneration records and any related party transactions. The valuation is the whole case here, and the difference between a net asset valuation with a minority discount and a maintainable earnings valuation without one is frequently a factor of three or four. Proceedings under sections 232 and 233 would be prepared and served, with the buy-out at fair value as the primary relief sought.
Scenario Two — Two Equal Shareholders in Deadlock Over Whether to Sell the Business
Two shareholders each hold fifty per cent of a logistics company turning over $6.4 million. Both are directors, there is no shareholders agreement, and the constitution contains no casting vote. One shareholder has received a third party offer to acquire the business and wants to accept. The other refuses to sell at any price and has begun withholding cooperation on operational decisions, including refusing to sign off on the renewal of the company’s main warehouse lease.
Neither shareholder can force the other out, and neither can pass a resolution. The company is now at risk of losing a lease it needs to operate, which means the deadlock is causing quantifiable damage rather than merely inconvenience. Deadlock of this kind is a recognised basis for winding up on the just and equitable ground under section 461(1)(k), and the court can order a buy-out under section 233 as an alternative to winding up.
Lazarus Legal would put a formal buy-sell proposal to the other shareholder first, structured as a shotgun clause where one party names a price and the other elects to buy or sell at that price. Where that is refused, the firm would prepare a winding up application on the just and equitable ground, supported by evidence of the lease position and the failed resolutions. The application is the mechanism that ends the deadlock, because a shareholder who genuinely wants to keep the business will almost always buy rather than allow the company to be wound up and the goodwill destroyed.
Scenario Three — A Founder Diluted by a Placement Priced Below Value
A founder holds thirty per cent of a technology company. The board, controlled by an investor group holding fifty-five per cent, resolves to issue new shares at $0.40 per share to raise $800,000, having valued the company at $6.5 million in an investor update issued four months earlier at an implied price of $1.30 per share. The founder is offered a pro rata participation right with a payment deadline of eleven days. The founder cannot raise the funds in that period, and after the placement completes the holding falls to seventeen per cent, below the twenty-five per cent needed to block a special resolution.
A company can issue shares, but the directors must exercise that power for a proper purpose. Where an issue is priced well below a recent valuation, on a timeline that makes participation impossible for one shareholder, and has the effect of removing that shareholder’s blocking rights, the proper purpose of the issue is squarely in question. That engages directors’ duties under sections 181 and 182 and is capable of amounting to oppressive conduct under section 232.
Lazarus Legal would move for an urgent interlocutory injunction restraining the allotment before it completes, because unwinding an issued and registered share allotment involving third party subscribers is far harder than preventing it. The supporting evidence would centre on the four-month-old investor update, the pricing gap, and the length of the participation window relative to any previous raise. Timing is decisive in this scenario, and a founder who waits until after the allotment has been registered has lost the most effective remedy available.