Shareholder Rights and Disputes

Corporate shareholders possess unique rights not shared by partnership arrangements. If these rights are violated, legal provisions are in place to allow remedy. If you are a shareholder and have a concern over a violation of your rights, a Massachusetts corporate attorney can help.

Benefits of Shareholders

Shareholders are, in effect, part owners of a corporation. They possess the power to vote on issues, and benefit when the corporation does well. Unlike a partner in a business, they generally are not involved in daily management of corporate affairs. They are also free from the burden of personal liability for debts that a corporation incurs. In other words, if the business fails, their personal assets cannot be attached.

Shareholders retain other rights as well, such as the receipt of dividends, the right to inspect corporate record books, and the right to bring suit against the corporation if their rights are violated or officers act illegally. A Massachusetts corporate attorney can be vital to the success of such a suit.

Liability of Shareholders

Shareholders can lose their investment as well, however. If the company fails, the shares they hold are lost. This provides an incentive to maintain a strong and healthy organization. Other rights and responsibilities of shareholders are dependent upon the corporation’s charter and by-laws. Matters which can lead to dispute often have their origin in the way the corporation was originally set up, but more often issues of misconduct or mismanagement are the root cause.

If There Is a Dispute

An attorney may be able to help a shareholder avoid the cost of full scale litigation through negotiation. Many forms of dispute are possible which may require legal assistance, such as:

  • Practices damaging the corporation’s success
  • Litigation designed to oppress shareholder rights
  • Financial disputes
  • Fraud or deception
  • Breach of fiduciary duty
  • Intellectual property issues
  • Employment disputes

Call Us

If you are a shareholder and feel that your rights are being violated, it is important to seek the assistance of a Massachusetts corporate attorney to seek a remedy. Call Ionson Law for a consultation at (781) 674-2562.

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