Shareholder Disputes Lawyers

When the people who own a company stop agreeing on how it is run, who gets paid or who gets to leave, the business itself can grind to a halt. A shareholder dispute lawyer can tell you what rights your shares actually give you, what your shareholder agreement says, and how to resolve the conflict, ideally without destroying the company. On this page you can compare lawyers who handle shareholder disputes, see their rates and availability, and book a consultation online.

Shareholder disputes are one part of business law. For incorporation, contracts, compliance and other company matters, see our page on business and corporate lawyers.

What a shareholder dispute lawyer does

Whether you hold a majority or a minority stake, a lawyer can:

• Review your position: the articles of the corporation, the by-laws, the minute book and any shareholder agreement, to see what you are actually entitled to.
• Explain your rights: voting, information, dividends, and what happens to your shares if you want out or are pushed out.
• Negotiate a way out: a buyout, a restructuring or a new agreement between the shareholders.
• Lead mediation or arbitration: when the shareholder agreement requires it, or when both sides prefer a private process.
• Go to court: to seek an oppression remedy or other orders, or to defend you if another shareholder sues.

Common shareholder disputes

Most conflicts between shareholders fall into a few familiar patterns:

• A minority shareholder is shut out of decisions, information or the business itself.
• Deadlock: two equal shareholders cannot agree, and nothing gets decided.
• Disagreement over dividends, salaries or how profits are used.
• A shareholder who is also a director or employee is removed from those roles.
• A shareholder wants to sell, retire or leave, and the others will not agree on a price.
• Suspected misuse of company money, or a director acting in a conflict of interest.
• The death, disability or divorce of a shareholder, and what happens to their shares.

How shareholder disputes work in Quebec

The rules that apply depend first on where the company was incorporated. Most Quebec companies are governed by the Business Corporations Act (Loi sur les sociétés par actions). Companies incorporated federally are governed by the Canada Business Corporations Act. Both statutes give shareholders similar tools, but the details differ, so knowing which one applies is the first thing a lawyer will check.

Beyond the statute, the company's own documents matter a great deal: the articles, the by-laws and, above all, any shareholder agreement. Disputes under these laws are generally heard by the Superior Court of Québec. In the district of Montreal, corporate and commercial cases are often handled by the court's commercial division, which is used to urgent applications and complex business files.

Remedies available to shareholders

Quebec and federal corporate law give shareholders several ways to protect themselves:

• The oppression remedy: a shareholder can ask the court to step in when the company's affairs are conducted in a way that is oppressive or unfairly prejudicial to them, or that unfairly disregards their interests. The court has broad powers, such as ordering the company or other shareholders to buy the shares, setting aside a decision or regulating how the company is run.
• The derivative action: when directors or officers harm the company itself, a shareholder can ask the court for permission to sue on the company's behalf.
• Access to information: shareholders have rights to consult certain corporate records and financial statements.
• Dissent and repurchase: when the company makes certain fundamental changes, a shareholder who objects may be able to require the company to buy back their shares.
• Breach of the shareholder agreement: a shareholder agreement is a contract, and a shareholder who breaks it can be sued like any other party to a contract.

Each remedy has its own conditions, and some can be combined. Short deadlines can also apply, so do not wait before getting advice.

The shareholder agreement: preventing and settling disputes

A well-drafted shareholder agreement is the best protection against a costly fight. It sets out, in advance, how decisions are made and how a shareholder can leave. Common clauses include:

• A right of first refusal before shares can be sold to an outsider.
• A buy-sell (shotgun) clause to break a deadlock between shareholders.
• Rules on valuing shares when someone leaves, dies or becomes unable to work.
• Tag-along and drag-along rights for the sale of the company.
• A dispute clause that requires mediation first, then private arbitration.

In a unanimous shareholder agreement, all the shareholders can also restrict or take over some of the directors' powers, which changes who is responsible for certain decisions. If your agreement has a mediation or arbitration clause, it may decide where your dispute is heard, so read it before thinking about court.

When to get a lawyer

• You are being excluded from decisions, information or the company's premises.
• You have been removed as a director or officer, or want to remove another shareholder.
• You want to sell your shares or trigger a buyout, and the other side will not cooperate.
• You suspect company money is being misused.
• You have received a demand letter, a shotgun offer or court papers.

Preparing for your consultation

Bring what you can find, even if the file is incomplete:

• The articles, by-laws and the minute book, or whatever part you can access.
• The shareholder agreement and any amendments.
• Recent financial statements and any documents about dividends or salaries.
• Emails, messages and meeting minutes that show what went wrong.
• A short timeline with dates, and what you want as an outcome.

Compare and book on JustiConnect

Browse the lawyers listed below, filter by location, rates and availability, and book a consultation directly. You can also search all shareholder dispute lawyers or see shareholder dispute lawyers in Montreal. Our guide on how to choose a lawyer in Quebec can help you compare profiles.

Frequently asked questions

How are shareholder disputes resolved?

Most are settled by negotiation, often with a buyout of one side's shares. If that fails, the shareholder agreement may require mediation or arbitration. Court, usually the Superior Court, is the last step, where a shareholder can seek an oppression remedy or enforce the agreement.

When can a shareholder sue another shareholder?

A shareholder can sue another for breaking the shareholder agreement. Under the oppression remedy, the court can also make orders against other shareholders, for example ordering them to buy the complainant's shares, when the company's affairs are run in an unfairly prejudicial way.

What rights does a minority shareholder have?

A minority shareholder usually cannot control decisions, but has rights to vote, to receive certain information and to be treated fairly. The oppression remedy exists largely to protect minority shareholders, and a shareholder agreement can add further protections, such as a veto on some decisions.

Can a shareholder take legal action against a director?

Yes, in some cases. When a director harms the company, the usual route is a derivative action, which needs the court's permission. When a director's conduct unfairly prejudices a shareholder personally, the oppression remedy can apply directly.