Shareholder disputes arise in a variety of situations and often require the preparation of an independent share valuation. All organizations, whether private companies, public companies, the public service, partnerships or family businesses, have inherent areas of possible dispute. Pursuing shareholder disputes settlement through litigation can be costly, lengthy and very public. Mediation offers an avenue which can be explored separately or as part of a corporate conflict resolution strategy.

    Most of the time, shareholder disputes result from the misunderstanding of each others' obligations or expectations in respect of the business. As a means of making a shareholder disputes settlement, the parties should, before entering into any business relationship, thoroughly conceive the purpose of forming the business and lay out the obligations or expectations of the shareholders. Going through a list of matters prior to the preparation of shareholder agreements helps people to understand what they are getting into and what relations they have formed among themselves.
There are many scenarios that can threaten the continuation of successful businesses. Shareholder disputes can generally jeopardize the financial, professional and personal interests of a company's shareholders. Without a shareholder disputes settlement plan to deal with unforeseen or difficult circumstances, the resulting conflict among shareholders can have grim consequences.

    Written agreements can help in shareholder disputes settlement, to avoid the costs of litigation and damage to the company. Agreements may specify the method used to approve compensation and whether a shareholder employed by the corporation can be terminated without cause. Provisions concerning the sale of employee-owned stock upon the employee’s termination or retirement can avoid disagreements and make for smoother transitions. Issues relating to the discharge of directors, who also have an ownership interest in the company, should also be considered.

    Shareholder agreements and the protections that they afford can avoid business disruptions and potentially disastrous litigation expenses and aid in the shareholder disputes settlement. To be effective, however, their provisions should be demonstrably fair both to founding and subsequent members. A well-considered and properly drafted shareholder agreement will help to create a harmonious atmosphere in which employees and shareholders pull together to promote their common interests in making a more stable and profitable company.

    Structuring an effective agreement requires independent advice and participation by all shareholders to completely make an effective shareholder disputes settlement. It can be a trial to work through, sometimes surfacing issues shareholders would rather not face. But a good shareholder disputes settlement can mean the success of the business or its downfall.