Shareholder Disputes

Shareholder disputes threaten the existence of even well-established companies. Whether a deadlock between equal shareholders, the exclusion of a disruptive shareholder, or a dispute over the validity of shareholders' resolutions — we represent your interests decisively and solution-focused.
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Prevention: Shareholder Agreement and Corporate Governance

The best shareholder dispute is the one that never arises. A carefully drafted shareholders' agreement and clear articles of association are the most effective instruments for preventing corporate conflicts. They should address: decision-making procedures for important matters, deadlock mechanisms for equal shareholding constellations, transfer restrictions and pre-emption rights, leaver provisions including valuation formulae, non-compete obligations, and information rights. Investing in sound documentation at the outset pays significant dividends later.

We review your existing shareholders' agreement and articles of association and identify weaknesses before they become disputes.

Shareholders' Meetings and Resolutions

Shareholders' meetings and the resolutions passed at them are the central arena of many corporate disputes. Defects in the convening of the meeting, the agenda, or the voting procedure can give rise to grounds for challenging or declaring void a shareholders' resolution. Particularly contentious are resolutions on capital increases, changes to the articles, and the dismissal of managing directors. We advise on convening and conducting shareholders' meetings and represent our clients in challenging disputed resolutions.

We advise you on the proper conduct of shareholders' meetings and the drafting of legally sound resolutions.

Exit Options and Shareholder Exclusion

When a relationship between shareholders breaks down irreparably, structured exit solutions must be found. The options range from voluntary departure arrangements and share buybacks to the judicially ordered exclusion of a shareholder in extreme cases. The valuation of the departing shareholder's interest — often the most contentious issue — must be governed by clear contractual provisions wherever possible. We develop exit strategies that protect our clients' interests while minimizing the disruption to the business.

We develop exit strategies with you and represent your interests in negotiations with co-shareholders or in court proceedings.

Claims for Breach of Duty

Shareholders and managing directors owe duties to the company that can give rise to claims for damages when breached. Shareholders owe a duty of loyalty that prohibits them from using their position to harm the company or other shareholders for personal gain. Managing directors face liability for breaches of their duty of care. Establishing and enforcing these claims — including the assembly of the necessary evidence — requires specialist corporate law expertise.

We investigate breaches of duty, assert claims for damages, and defend you against unjustified allegations.

Frequently asked questions:

Can a shareholder be excluded from a GmbH?

Yes — under certain circumstances. The exclusion of a shareholder from a GmbH requires either a contractual basis in the articles of association or a judicial order. The threshold for judicial exclusion is high: the shareholder's continued membership must make it impossible or unreasonably difficult for the other shareholders to continue the company. The excluded shareholder is entitled to receive fair compensation for their share.

What is a deadlock, and how can it be resolved?

A deadlock arises when shareholders holding equal voting rights cannot reach agreement on an important decision, paralyzing the company. Deadlock situations are most common in 50:50 shareholding structures. Resolution mechanisms include: mediation or arbitration, the appointment of a neutral third party as tiebreaker, buy-sell provisions (the 'Russian roulette' clause), or in extreme cases, the dissolution of the company.

What are the duties of loyalty of shareholders?

Shareholders of a GmbH owe a duty of loyalty to the company and to their fellow shareholders. This duty prohibits them from using their position as shareholders to pursue personal interests at the expense of the company or other shareholders. Concrete expressions of this duty include the prohibition on competition with the company without consent, the obligation not to misuse insider information, and the duty to support the company's interests.

How can shareholders' resolutions be challenged?

Shareholders' resolutions can be challenged by way of an action for annulment before the competent court. The grounds for challenge are either procedural defects in the adoption of the resolution or substantive violations of the law or the articles of association. The action must be brought within a reasonable time — typically within one month of the resolution being passed. Legal advice should be sought immediately if a resolution is to be challenged.

What rights do shareholders have in conflicts?

In disputes, shareholders have various rights to protect their interests. These include the right to information, the right to convene a shareholders' meeting, the right to challenge resolutions, and the right to compensation for breaches of duty. For GmbHs, minority shareholders have specific protective rights, such as the right to appoint a special auditor or to initiate a special audit. The right to withdraw or be expelled can also be relevant. Crucially, these rights must not be abused and must adhere to the duty of loyalty. We advise you on your rights as a shareholder and help you enforce them effectively.