When Shareholder Disputes Become a Legal Problem
When disagreements escalate into a decision-making deadlock — no quorum, blocked resolutions, refusal to cooperate — the company loses its ability to operate.
Judicial Exclusion — Art. 266 KSH
All remaining shareholders, holding in total more than half of the share capital, may request judicial exclusion of a shareholder for important reasons (art. 266 § 1 of the CCC): acting to the company's detriment, breaching non-compete, persistently blocking resolutions.
Share Redemption
Voluntary or compulsory (requires provision in the articles). Compensation not lower than book value of shares.
Judicial Dissolution — Art. 271 KSH
Last resort: when the company's purpose has become impossible. Court considers depth of conflict and availability of alternatives.
Shareholders' Agreement as Prevention
Deadlock-breaking mechanisms: drag-along/tag-along, shotgun clauses, mandatory mediation, pre-emptive rights.
Interim Protection During Disputes
The court may suspend a shareholder's rights, appoint a compulsory administrator, or prohibit specific actions.
Shareholder conflict paralyzing your company? Get in touch — we'll find a solution.