Efficient Resolution of Shareholder Disputes
At Forensic Accountants & Consultants, we've assembled a skilled team of Certified Public Accountants and Certified Fraud Examiners to assist businesses, government agencies, and individuals with their forensic accounting needs. Our experts break down complex financial situations using reports, exhibits, and visual aids. Since 2013, we've served clients across the United States from our offices in New York, Los Angeles, Las Vegas, Washington D.C., Atlanta, and Florida. We are well-versed in litigation and are prepared to assist with shareholder disputes.
A shareholder dispute can be stressful, complex, and challenging to resolve. When you choose to partner with our forensic accountants, we are committed to uncovering the facts and resources of the situation at hand. Our capabilities include business valuations, fraud detection and prevention, forensic accounting, expert witness testimony, and consultation. If you find yourself amid a shareholder dispute, call our forensic accountants today to set up your free consultation!
What is a Shareholder Dispute?
Shareholder disputes consist of disagreements over the governance, finances, operations, or goals of a company. A shareholder dispute may occur amongst shareholders or between shareholders and the company's leadership. Since shareholders have invested a portion of their hard-earned wealth into the business, a conflict of this nature can quickly become hostile. Our experts can help you sort out the facts of the situation, which can often be more complex than a standard business dispute.
Common Causes of Shareholder Disputes
A shareholder dispute can arise unexpectedly for several reasons. It's essential to seek out experienced financial counsel in the early stages of a shareholder dispute before the situation devolves and adversely impacts your company's finances or public image. Our forensic accountants are ready to assist you with:
Alleged Breaches of the Shareholder Agreement
A breach of the shareholder disagreement can take numerous forms. One shareholder may decide to sell their shares in direct violation of the agreement, which is problematic if they sell shares to a competitor. A breach can also occur when one shareholder seeks to terminate the deal entirely, against the wishes of other shareholders.
Disagreements Over the Company's Direction
Disagreements over a business's direction and management can cause significant issues, particularly for closely-held family enterprises. Decisions that can lead to problems include large outlay or purchases of capital, financial disruptions, and the letting go of or firing of non-shareholder employees.
The shareholders of a privately-held corporation have fiduciary duties to one another, even if the company does not employ them. They should deal with one another honestly and openly. Shareholders that have conflicts of interest or withhold crucial financial information can inadvertently cause significant disputes.
A Lack of Influence Amongst Minority Shareholders
A minority shareholder in a privately-held business is at an instant disadvantage since their portion of ownership is smaller, and they may have little say in the business's decisions. Many states recognized this and sought to protect the rights of minority shareholders, so they aren't frozen out of management and decisions. Oppressed minority shareholders may initiate suits against majority shareholders if they have substantial evidence that they have been mistreated.
Differences in Contribution or Compensation
As a business owner, you should fairly compensate your company's employees according to their responsibilities, training, experience, and industry. When shareholder employees are paid at different rates for no evident reasons other than family connections, conflicts may arise. Differences in shareholder contributions can also lead to issues.
How We Can Help
We've found that the best way to prevent contentious shareholder disputes is to have a well-drafted, thorough, and substantial shareholder agreement in place from the start. Having your contract reviewed by an experienced financial services lawyer and a skilled accounting team can be beneficial in the long run. Our forensic accountants can evaluate the financial components of the shareholder agreement and provide suggestions to make it as effective as possible.
Even a shareholder agreement that has been carefully planned and reviewed may not prevent all potential issues. If you find yourself in a shareholder dispute, our forensic accountants dive into the data to unravel the financial situation. We begin by thoroughly reviewing the company's books. By studying and organizing the records, we can develop an understanding of the scenario at hand. Our consultants carefully check for fraudulent transactions, partners involved in self-dealing, and undisclosed liabilities.
The early stages of our investigation are crucial. By evaluating and discovering fraud early on, it may be possible to avoid trial and offer an acceptable settlement. We keep meticulous records of our findings, so they may be used as relevant evidence even if the case does not go to court. As the investigation continues, we can:
Resolving Shareholder Disputes with Meticulous Accounting
Whether you're looking to reduce the risks of shareholder disputes or resolve an ongoing situation, our forensic accountants are here to help. We provide the guidance, logistics, and analytics you need to make sense of your problem. Our team looks forward to partnering with you, so get in touch with Forensic Accountants & Consultants today to schedule your free consultation!