Shareholder Dispute

Challenge to the Directors and Managing Partners

If disagreements arise between shareholders of a limited liability company (GmbH), a limited partnership (KG), a general partnership (OHG) or a civil law association (GbR) the shareholders involved will in a lot of cases no longer be focused on the same goal, but mutually impede the company and its business. In such a situation the directors or managing partners have to act as agents in order to conciliate the opposing views. It should be their aim to resolve the rising conflict without provoking damages to the company. If not possible, the directors have to minimize the impact of the conflict on the company and its business. A shareholder’s dispute puts high demands on an uninvolved director or managing partner. At such times there are additional liability risks, not least because of the increased risk of insolvency. Directors and managing partners should not act without external advice in such a situation.

Challenge for the shareholders who are not involved

The dispute between two or more shareholders often arises to a problem for the directors or the managing partners, but also for the other shareholders. The conflict, in which they do not even have to be directly involved, will affect their legal position. There is a great variety of legal opportunities on how to face such a conflict. The parties not directly involved should consider how to react as best as they can. To act carelessly may lead to a disadvantage which cannot be compensated later.