Courts Actions: Shareholder Deadlock
If shareholders are in dispute and have reached a deadlock, what can they do?
They can of course apply to Court for a remedy, and available Court actions are touched on below, but going to Court is almost invariably a very bad idea. Instead of asking a Court to make a decision about what happens, it’s better for the shareholders to agree in advance.
Remedies
If shareholders are in dispute and have reached a deadlock, the following remedies may be available through Court under the Corporations Act:
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Winding-up under section 246 or 233 of the Corporations Act
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Appointment of a receiver or a receiver and manager
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A buy-back of shares by the company
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Modification or repeal of the company's constitution
(For more information, see Company Wind-ups and Shareholder Oppression under Section 232).
Agreement Instead of Court
Going to Court can be much like playing Russian Roulette. Why not play your own Russian Roulette without the cost, stress, time-wasting and uncertainty? Or earnestly try to reach a settlement through Mediation.
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