One of the most common areas of dispute we deal with is between shareholders and the management or directors of a company. Left unresolved, these can quickly lead to bad feeling, loss of focus, reduced profitability or even company insolvency.
Disputes between shareholders and company directors can quickly harm a business. When trust breaks down, decisions stall, morale drops and value is lost. At Francis Wilks & Jones, we help shareholders resolve management disagreements quickly and cost-effectively.
Our lawyers have over 20 years’ experience dealing with boardroom disputes across all sectors. We combine a deep understanding of company law with practical negotiation skills to protect your investment and restore stability, whether that means repairing working relationships or achieving a fair exit.
What causes disputes between shareholders and management?
Disputes often arise when directors and shareholders disagree on how the company should be run. Typical examples include:
- directors excluding shareholders from information or decisions
- unpaid or inconsistent dividends
- disagreements about business direction or investments
- concerns about misuse of company funds or excessive pay
- personal or family disputes spilling into business operations
If left unresolved, these issues can cause serious damage to the company. They can also lead to allegations that directors have breached their legal duties or acted unfairly towards certain shareholders.
What are directors’ legal duties and how can they be breached?
Directors must follow clear duties set out in the Companies Act 2006, sections 171–177. These include duties to:
- act within powers
- promote the success of the company
- exercise independent judgement
- avoid conflicts of interest
- use reasonable care, skill and diligence
If a director acts outside of these duties, for example by diverting business, removing assets, or prioritising personal gain, affected shareholders may have grounds to act.
Our team advises on how to gather evidence, assess breaches and take proportionate action. Depending on the situation, options can include:
- an unfair prejudice claim under section 994 of the Companies Act 2006
- a derivative claim under section 260
- a claim for breach of directors’ duties against those responsible
How can shareholders resolve management disputes without going to court?
Court proceedings are rarely the best first step. In most cases, disagreements with directors can be resolved through early dialogue, negotiation or mediation.
At FWJ, we start by understanding what has gone wrong and what outcome each side really wants. We then work to build consensus or, where that’s not possible, to achieve an orderly separation that protects business value.
Our experience includes:
- facilitating private negotiations between shareholders and directors
- arranging independent mediation to explore settlement options
- redrafting shareholder or board agreements to clarify responsibilities
- resolving dividend, pay or voting disputes through compromise
This approach often restores trust and allows the company to move forward without hindrance/damage to financial or reputational interests.
What if a director refuses to cooperate or continues to act unfairly?
If management ignores shareholder concerns or continues to act improperly, stronger measures may be required. Under section 168 of the Companies Act 2006, shareholders can call a meeting and remove a director by ordinary resolution passed by a simple majority (over 50% of members). For more detail see our Director Removal page.
Where misconduct or exclusion persists, legal claims may be necessary:
- Unfair prejudice petitions under section 994 if management decisions unfairly harm a shareholder’s interests.
- Derivative claims under section 260 to pursue wrongs done to the company itself.
We advise on which route gives you the best chance of success and how to preserve your evidence including board minutes, correspondences, and financial records.
When is court action necessary to protect the company’s interests?
If directors breach their duties and refuse to cooperate, court intervention may be unavoidable. Our commercial litigation team has extensive experience bringing and defending claims in the Business and Property Courts.
Court action may be necessary where:
- directors have diverted assets or opportunities
- shareholders have been excluded from management
- one side refuses to comply with the company’s constitution
- the business cannot function because of deadlock
Possible remedies include injunctions to restrain misconduct, compensation orders for losses, or, as a last resort, winding up the company on just and equitable grounds.
Our shareholder disputes team at FWJ includes
Andrew Carter (Partner)
Andrew Carter is a commercial litigation partner with extensive experience resolving shareholder and partnership disputes. He acts for business owners, directors and investors in complex conflicts over control and value. Clients trust his calm, strategic approach and focus on achieving practical, commercial outcomes.
Gemma Newing (Senior Associate)
Gemma Newing is a commercial litigation solicitor with strong experience in contractual and company disputes. She acts for businesses and shareholders in complex claims requiring clear strategy and efficient resolution. Clients value her focus, responsiveness and commitment to achieving practical results.
Anna Beetson (Solicitor)
Anna Beetson advises SMEs, directors and shareholders on commercial and company disputes, with a focus on efficient and practical resolution. She combines strong technical knowledge with a clear, client-focused approach. Her work covers contractual claims, shareholder disagreements and boardroom issues.
Athena Kam (Paralegal; Unregistered Barrister)
Athena Kam supports clients across commercial litigation, director disqualification and debt recovery matters. Drawing on her background as an unregistered barrister, she brings analytical precision and attention to detail to every case. She assists in preparing evidence, drafting submissions and managing proceedings efficiently.
Contact us today to schedule a free consultation and let us guide you through the complex process of resolving disputes with management or the board of directors. We can help you through this and achieve a successful outcome.
Supportive and friendly with partner-led involvement, I would recommend Francis Wilks & Jones to anyone facing a similar situation.
A shareholder who turned to us after discovering that his co-shareholder was profiting well from their business while he was being paid a pittance. We helped him find a way out of the business by selling his shares
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