Shareholder Disputes & Litigation Attorney in Birmingham, Alabama

Owner disputes can arise due to different reasons, including disagreements with business partners, differences of opinion, breaches of shareholder/member/partner agreements, or breaches of fiduciary duties. Unfortunately, these owner disputes often affect the normal operation of the company. If you're involved in a shareholder/member/partner dispute that may lead to litigation, consulting with an experienced Alabama commercial litigation attorney is crucial for detailed guidance.

John is an astute business counselor and seasoned litigator who is dedicated to helping business owners resolve disputes between shareholders, members, or partners. He is available to review your situation, help you understand your legal options, and direct you toward the best course of action. As your legal counsel, John will guide and represent you throughout the entire legal process, and craft an effective strategy to protect you and your company from potential liabilities.

Clark Law Firm PC proudly serves business owners and shareholders in Birmingham, Alabama, across the state of Alabama, and throughout the Florida Panhandle. Contact the firm today to schedule a consultation.

Shareholder Rights

A shareholder is a person with an ownership interest (share) in a corporation. Similarly, a member is a person with an ownership interest in a limited liability company or LLC. A partner is a person with an ownership interest in a partnership. Although each of these owners has different rights and remedies, those rights overlap in many situations.

Shareholder Rights in Alabama

Here are some of the rights of shareholders in Alabama:

• Shareholders have the right to adopt, amend, or repeal the initial bylaws and emergency bylaws of the corporation.

• A shareholder is entitled to inspect and copy various corporate documents, including a list of shareholders and basic financial documents.

• Shareholders can elect one or more directors at the first annual shareholder's meeting and at each annual meeting thereafter.

• A corporation shall hold a meeting of shareholders annually at a time stated or fixed in accordance with the bylaws.

• The corporation must notify the shareholders in writing of the date, time, and place of each annual meeting at least ten days prior to the meeting date.

• Each outstanding share is entitled to one vote on each matter voted on at a shareholders' meeting.

• Shareholders of an Alabama business corporation may vote by proxy.

• The plan of merger must be approved by shareholders.

• Shareholders' consent is required before the sale of all or substantially all of a corporation's property or asset.

• The shareholder's approval is required before the dissolution of the corporation.

• The majority shareholders owe a fiduciary duty to the minority shareholders to not use the majority's control of the corporation to put the minority shareholders at a disadvantage.

• Shareholders have the right to bring derivative suits on behalf of a corporation for wrongs against the corporation.

Shareholder Rights in Florida

In the state of Florida, shareholders have the following rights:

Shareholder Inspection Rights

Shareholders have the right to request, inspect, and copy any of the following documents:

• Minutes of meetings of the board of directors, committees, and shareholders

• The financial statements of the corporation

• Records of actions taken without a meeting

• Accounting records of the corporation

• The record of shareholders and any other books and records of the corporation

Shareholder Oppression

The majority shareholders owe a fiduciary duty to the minority shareholders to not use their control of the corporation to put the minority shareholders at a disadvantage.

Shareholder Derivative Suits

Shareholders have the right to bring derivative suits on behalf of a corporation for wrongs against the corporation.

Voting of Directors

Directors are elected by a plurality of the votes cast by the shares entitled to vote in the election. Each shareholder who is entitled to vote in an election of directors has the right to vote the number of shares owned by him or her.

Dissolving the Corporation

Florida's Business Corporation Act ("BCA") establishes that the corporation may be dissolved voluntarily through a shareholder vote at a shareholder meeting.

Common Causes of Shareholder Disputes

Disputes between shareholders, members, or partners often occur when the shareholders, members, or partners feel their rights have been infringed upon. Some of the most common causes of shareholder, member, or partner disputes include:

• Differences of opinion regarding the direction of the business

• Breaches of shareholder agreements

• Breaches of fiduciary duties

• Infringement of the rights of minority shareholders by the majority shareholders

• Failure to keep shareholders up-to-date about the company's finances

• Conflicts of interest allegations

Options for Resolving Disputes

Some possible options to resolve disputes and disagreements between shareholders, members, or partners include:

• Direct discussions for resolution

• Direct discussions regarding purchase/sale of a shareholder/member/partner's ownership interest

• Mediation

• Arbitration

• Litigation

An attorney can provide insight into the cause of the shareholder disputes and help determine the best way to resolve disagreements.

Work with an Experienced
Business Litigation Attorney

Over time, business relationships may become strained and may affect the operating procedures of the company. A belief that any director, manager, shareholder, member, or partner is not fulfilling that person's fiduciary duties or is failing to act in the best interest of the business may result in owner disputes and require court intervention. If you are involved in a shareholder/member/partner dispute that may lead to litigation, consulting with an experienced Alabama and Florida business litigation attorney is the best option.

John W. Clark IV is committed to representing business owners and shareholders/members/partners in business lawsuits and dispute resolution matters. As your legal counsel, he can evaluate your current situation and determine how to resolve such shareholder/member/partner disputes fairly and equitably, or through other legal remedies. John can help you take preemptive measures to address such issues quickly and peacefully, if possible, and mitigate liability or damages. He will dedicate every available resource at his disposal to find solutions to your business problems and help you in a way that works best for you