This sets out a standard sequence for handling a shareholder dispute in its early stages, when it is still more likely to be resolved without litigation.
Step 1 — Identify the actual issue
Distinguish between a genuine legal grievance — denied information rights, improper share dilution, exclusion from decisions — and ordinary disagreement about business strategy, which is not itself a legal wrong.
Step 2 — Check the shareholders’ agreement first
Confirm what mechanism, if any, the agreement provides for the specific type of dispute involved, and follow it, rather than escalating past a mechanism the parties already agreed to use.
Step 3 — Document the conduct in question
Gather board minutes, correspondence and financial records relevant to the specific conduct alleged, contemporaneously rather than reconstructed later.
Step 4 — Raise it formally in writing
A written communication to the company or the other shareholders, setting out the concern clearly, is generally the appropriate step before escalating further, and creates the record needed if the matter does escalate.
Step 5 — Escalate only if the issue is not resolved
Where the concern is not addressed, the statutory remedies for oppression and mismanagement, or an agreed deadlock mechanism, become the appropriate next step.
What to do next
Bring the shareholders’ agreement, the company’s constitutional documents, and a chronology of what has happened, so the right next step can be identified.