Missouri Shareholder/Member Disputes
Business disputes can happen for a variety of different reasons. First, there is a difference between shareholders and members, although they are used synonymously. When a company is incorporated as a corporation, the owners are considered to be shareholders. When a company is incorporated as a limited liability company, the owners are considered members.
Disputes can arise from the owners wanting to terminate the shareholder/member relationship, dissatisfied with actions by the majority shareholders/members or a claim by the minority shareholders/members against the majority shareholders/members actions.
While being the owner of a business, shareholders whom are managers of the business (board members, CEO, president, etc.) have a fiduciary duty to the company and the remaining shareholders. The same holds true for members whom are managers of an LLC (managing members).
In addition to the managing member and board of director member, if you are the majority shareholder or member of a business you may also have a fiduciary duty to the company. These individuals have a duty of care and a duty of loyalty to the company and its shareholders or members.
The duty of care requires the directors or members to acts in a reasonably prudent manner when making decisions, adequately conduct due diligence and act in good faith.
The duty of loyalty requires the directors or members to put the business first, above their own self interests. The duty requires those directors or members to disclose and avoid and possible conflicts of interest and preclude those directors or members from any self-dealings.
Shareholder and member disputes can result in very tenuous and difficult litigation process. Hiring an experienced attorney who can quickly and effectively investigate and defend the claims against you will help assure you obtain a favorable result.
Contact Howard Law at (314) 325-9868 if you’re involved in a shareholder or member dispute.