HomeFWJ takeawayTakeawayShareholder and director servicesShareholder rightsShareholders & directors: common areas of dispute

At Francis Wilks & Jones our team of experts in shareholder and company disputes see many different types of cases come through our door. Our superb team has helped 100's directors and shareholders resolve their disputes over the past 20 years. Let us help you too.

Many companies that start optimistically with high hopes of success can unfortunately find that directors and shareholders later fall out over any number of issues. This is particularly prevalent in times of financial stress, such as we are seeing with the COVID-19 crisis, where directors and shareholders have to face difficulties that they have not encountered before. This puts them under extra stress, and problems that may not have escalated at other times, quickly escalate in this type of situation.

Personality clash

Frequently we see disputes arising from a personality clash between directors. Directors who may have got together initially and pooled their skills and resources to set up in business, may grow apart and see the business going in different directions.

  • there is often a tension between directors who believe that they are working extremely hard in the company, compared to other directors who they think are not pulling their weight;
  • an extreme example is where one of the original investors is a sleeping partner, taking no part in the management of the company but taking similar dividends at the end of the year.

Conversely, we frequently see instances where there are dominant directors, often the managing director or finance director, who run the company refusing the input of other directors or business investors.

Failure to pay dividends

We see many shareholders who are disgruntled because despite investing in the company they have not received dividends. Sometimes this is for a legitimate reason. It is not always the case that dividends will be declared even if the company is in profit. However, this can be a common source of dispute between shareholders and the company, and can lead to either a claim against the company or, more frequently, shareholders wanting to exit and sell their shares.

Fraud and dishonesty

Unfortunately, in some disputes with directors, we see fraud and dishonesty play a role. The role of the director is based on trust and confidence but there is much scope for abusing that trust particularly where large amounts of money are involved.

We see instances where directors divert assets away from the company, either for their own personal interests or into businesses in which they have an interest. If fellow directors and/or shareholders are either unable or unwilling to take control of those directors, then this can lead to a significant breakdown and sometimes the end of a company in this situation. There are many remedies that a company or its shareholder can take in these circumstances.

Shareholders agreement

Our experience is that a carefully drafted shareholders agreement can often prevent disputes arising between shareholders and the company, particularly if the agreement is very clear on what is expected of all parties. Even if disputes can’t be prevented, a well worded shareholders agreement will set out what happens on a dispute, including how to exit the company and sell shares, as well as other remedies, making the process far less painful.

At Francis Wilks & Jones we have many years’ experience advising business owners and directors in all areas of dispute. Contact us to discuss how we can help you. The most common areas for you to be concerned with in terms of likely reasons for dispute are the following:-


Please call any member of our team for your consultation now. Alternatively email us with your enquiry and we will call you back at a time convenient for you.

Case studies

View all case studies

Contact us in confidence