Dividends Disputes

What else you might like to know about Dividends Disputes

If shareholders of a business are in dispute over company dividends, it is important to consult an experienced legal service provider. Here is some basic advice and guidance to inform your choice of legal expert. 

What are dividends?

A dividend is a sum of money paid annually to a company's shareholders. Dividends are paid out of the business's yearly profits. Dividends are usually provided as an incentive to entice shareholders to join a business. 

What are the most common dividend disputes?

Dividend disputes most commonly arise when the minority shareholders suspect the majority shareholders of foul play. This usually includes the majority shareholders manipulating profits to avoid paying out a dividend whilst paying themselves in other ways. 

How can a legal expert help?

An expert legal service provider will be able to examine the dealings of the business and the actions of the majority shareholders in detail to establish whether foul play has taken place. If anomalies are found in a company’s financial dealings, a legal expert is well placed to advise you on next steps – such as court action. 

Is dividend manipulation illegal or immoral?

Manipulating profits to avoid paying dividends may not be a criminal activity but it is one that can be claimed against. If the courts find sufficient evidence to support a claim then various remunerations may be ordered. Alternatively, a judge may demand that a company is wound up in order to release funds. 

How should I choose the best legal service provider?

Dividend disputes require the involvement of a legal service provider with extensive knowledge and experience in business disputes. You may wish to take into consideration a number of factors such as location, cost and the reputation of a firm. The Law Superstore’s client rating and review system will help you to make this assessment.

Answer a few short questions now and start comparing legal service providers based on the criteria most important to you.

What pricing structure can I expect?

The time and resources required for handling a dividend dispute may vary depending on whether mediation or court action is required. Legal service providers may offer their services on an hourly rate basis or a fixed fee with capped hours basis.