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Most Common Reasons for Minority Shareholder Disputes in Florida

Minority shareholders (those who own less than 50 percent of the total shares of a business) inherently lack voting control over a corporation. As such, a minority shareholder cannot solely direct the future of the company or select corporate officers. Of course, this means that minority shareholders are forced to rely on the good business sense and ethical actions of the company’s other shareholders.

Yet, sadly, in some cases, majority shareholders, or a combination of aligned minority shareholders, attempt to take advantage of a minority shareholder’s business interests. In other cases, majority shareholders may damage a minority shareholder’s value through negligence. Either way, this can lead to disputes that are difficult to resolve.

If you are a minority shareholder in Florida, and you believe that your rights are being infringed upon in any way, you need to consult with a top-rated Florida business law attorney immediately. Your attorney will be able to review the circumstances of your claim, and determine exactly what needs to be done to protect your shareholder rights and your business interests.

The Four Most Common Causes of Minority Shareholder Disputes

  • Breach of the Shareholder Agreement

A shareholder agreement, which is a contract between the shareholders of a company, provides the foundation for minority shareholder rights. If any other party has violated the terms of your shareholder agreement, and you sustained real financial damage as a result, you may be able to hold them liable for your damages. If you are in a major dispute over your shareholder agreement, you should be represented by an attorney.

  • Breach of Fiduciary Duty

Shareholders, along with a corporation’s officers and directors, owe a fiduciary duty to the company’s minority shareholders. When this duty is breached, it can cause serious financial damage to minority shareholders. Breach of fiduciary duty can come in many different forms, including acting in bad faith, negligent management and failure to disclose conflicts of interest. If you were a victim of breach of fiduciary duty, you should contact an experienced business law attorney immediately.

  • Disagreement Over Direction of the Business

In some cases, serious disputes can arise over the future direction of the business. This is an especially common issue for minority shareholders of closely held corporations. These types of disputes can be difficult to resolve, and a minority shareholder may need to take legal action to protect their rights.

  • Minority Shareholder Oppression

As minority shareholders are in a disadvantaged bargaining position, their rights must be protected. Under Florida law, minority shareholders are granted several valuable legal rights, including inspection rights and distribution rights. Unfortunately, far too frequently, larger shareholders will attempt to take advantage of minority shareholders, freezing them out or unfairly damaging or diluting their interests.

Contact a Clearwater, FL Shareholder Disputes Attorney Today

At Clearwater Business Law, our dedicated Florida business law team has the skills and experience needed to protect your rights as a minority shareholder. To learn more about what we can do for you, please call us today at (727) 877-4931 to set up your business law consultation. From our office in Clearwater, we represent minority shareholders throughout the region, including in Pinellas County and Hillsborough County.