Shareholder Disputes Under Florida Law: What You Need to Know
By: Kreindler Legal Staff
Shareholder disputes can occur in any business or company; however, learning to deal with them can be difficult. The right attorney can make an incredible difference in helping affected shareholders move forward. Here’s how.
Shareholders in Florida have a lot of responsibility when it comes to guiding and directing a company. Majority shareholders typically make major decisions regarding a corporations direction and typically have the most control when it comes to choices that may impact the future of a company. Minority shareholders - those that make up less than 50% of a particular company - still have important rights and obligations, however. In some cases, shareholders may feel they have been violated in some way. Perhaps a minority shareholder feels their rights have been violated or a majority shareholder believes they have been wronged in some way. Should a shareholder find themselves in a disagreement with other parties within the business, this is considered to be a shareholder dispute. It is a legal issue that is quite serious and should be treated as such. Fortunately, there are several steps any violated shareholder can take to help resolve disputes reasonably and quickly.
First off, it’s important to identify the source of the wrong and to determine what process was violated. For example, shareholder oppression is one of the most common issues in Florida that can affect minority shareholders especially. This occurs when majority shareholders cause trouble, stress, or financial difficulties for minority shareholders by illegal withholding vital information about the company, its shares, and their roles within it. Minority shareholder repression can occur when majority shareholders refuse to disclose vital financial information about the company or when they mishandle the records related to the company. Minority shareholders may also face oppression when they are removed from the board of directors or other leadership roles. Should this occur, it’s important that the minority shareholder get help as soon as possible.
Shareholders who experience violation need to bring as much evidence and documentation as possible with them when they meet with an attorney. This will help their lawyer as they decide how to move forward with the issue. Shareholder disputes in Florida can be complicated; however, the right lawyer understands the law thoroughly and can not only advise shareholders of their rights, but can offer guidance through the issue of legal disputes surrounding shares and shareholders. One important thing to remember is that in Florida, majority shareholders have a fiduciary duty. This means they are legally required to act in the best interests of the company. They cannot legally make choices that are poor for the company, but good for themselves. Doing so is a breach of fiduciary duty and is a major issue. More importantly, it is grounds for a lawsuit to occur.
Shareholders who are concerned about the direction a company is going or who feel they have been manipulated or wronged need to reach out to an attorney as quickly as possible. A lawyer will be able to offer insight and guidance when it comes to handling shareholder disputes. The legal system is designed to protect shareholders, so during times of shareholder oppression, understand that it’s possible to find a resolution that is both reasonable and appropriate for the situation at hand.