Business Litigation Shareholder Disputes & Derivative Actions

Derivative actions and shareholder disputes arise in the context of both large companies and closely held companies. Closely held companies and Limited Liability Companies are very common today as individuals seek to transact business within the context of the corporate form. The advantages of utilizing the corporate form can be numerous, including shielding liability and tax advantages.

Oftentimes, particularly in the context of closely held corporations and limited liability companies, disputes may arise between shareholders or members relating to the governance or management of the company. Ideally, these matters can be resolved without resorting to litigation. However, in some instances litigation is necessary in order to protect one's legal rights with respect to a corporation.

A related type of dispute which may arise relates to the company's rights as to an outside entity. Frequently, a shareholder or member may believe that the rights of the company must be protected through litigation but may not have the voting power to cause the company to institute suit. Derivative actions are one method for addressing this sort of dilemma.

When closely held companies, including "not for profit companies" amass significant assets, they often become the targets of ill intentioned individuals who attempt to forcibly seize control of the company. Due to this threat, it is important for companies to properly document their business and to follow the necessary corporate formalities. Despite appropriate corporate management and governance, sometimes it is necessary to protect the company from interlopers via court action.

Regardless of the nature of the particular corporate dilemma, it is important to seek competent and experienced legal counsel as early as possible. Andresen & Arronte seeks to reasonably resolve such matters without the necessity of litigation, but when litigation is necessary we are ready for the challenge.