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Sometimes it is unavoidable with conflicts within a firm. How to handle the exit of a partner or the threat of a collapse of the firm demands forceful and attentive handling. We have long experience in dealing with conflict in companies and partnerships.
If the parties has signed a shareholder agreement, that would be the natural starting point to look for solutions when conflicts have arisen. Many times, however, no written agreements have been signed by the parties. Consequently, a conflict becomes more difficult and may require legal advice in order for the parties to resolve the conflict. Sometimes a legal process in court or arbitration is the only way out. Many times disputes can be resolved “out of court”, i.e. the parties go their separate ways.
Often conflicts within companies concern remuneration issues and how large wages or remuneration to which the shareholders are entitled. If this is not regulated, shareholders may be tempted to act in their own interest, to the detriment of other shareholders and the company as a whole.
Disputes over intellectual property rights (IPR)
For companies based on intellectual property rights, these may need to be protected. One of the partners may start a competing business based on the same rights. In that case the company may need to secure its intellectual property rights by filing a legal action against the infringing parties.
Prevention of partner conflicts
We recommend that co-operation in companies is preceded by shareholder agreements or partner agreements where the shareholders agree in writing on how the business is to be conducted. For limited companies, the Articles of Association require coordination with other agreements governing the business.