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Four Things You Need To Know About Shareholder Disputes Under Florida Law


A shareholder of a corporation is an entity—an individual, a company, etc—that owns a stake in the business. Minority shareholders do not have direct control over how a business is operated. As a consequence, they have to put their faith into the hands of other parties. Disputes between corporations and their shareholders can arise for a wide array of different reasons. This is a highly technical and specialized area of business law.  In this article, our West Palm Beach shareholder disputes lawyers highlight the three key things you need to know about shareholder disputes under Florida law.

  1. There are Two Types of Shareholder Lawsuits 

A shareholder dispute could lead to a lawsuit. There are actually two distinct types of shareholder lawsuits. The first type of shareholder lawsuit is called a direct action. It occurs when a shareholder files a lawsuit against the corporation or one or more of its officers in the personal capacity. The second type of shareholder lawsuit is called a derivative action. It occurs when a shareholder moves to file a claim on behalf of the corporation itself. In most but not all cases, a shareholder derivative lawsuit is filed against an officer, director, or other corporate insider. 

  1. Florida Law Provides Legal Protection to Shareholders 

Shareholders have certain rights and protections under Florida law. For example, under Florida Statutes § 607.1602, shareholders have certain inspection rights. They can move to access and review key corporate documents and records. The officers and directors of a corporation in Florida must respect the rights of shareholders. 

  1. Shareholder Agreements, Corporate Bylaws, and Other Documents are Essential 

A corporation’s governing documents always matter. Indeed, it’s the corporate bylaws, a shareholder agreement, and other foundational documents of the company that will primarily govern the relationship between a minority shareholder and the corporation. The rights, responsibilities, and interests of shareholders are primarily derived from these key corporate documents. 

  1. It is Often Best to Try to Resolve a Shareholder Dispute Outside of Litigation 

Shareholder disputes are complicated. To a degree, all shareholder disputes involve parties that are technically supposed to be on the same side. Though, they may certainly have opposing interests in some circumstances. Nonetheless, it is a best practice to try to find a resolution to a shareholder dispute at the lowest level of conflict possible. Avoiding litigation can save time and money. While litigation will prove to be necessary in some cases, shareholder disputes may be strong candidates for alternative dispute resolution (ADR). Arbitration and mediation offer potential solutions.

Consult With a West Palm Beach Shareholder Dispute Attorney Today

At Pike & Lustig, LLP, we are committed to helping clients navigate the complexities of shareholder disputes. If you have any specific questions or concerns about shareholder law or shareholder disputes in Florida, we are here as a resource. Connect with us today to arrange your confidential initial appointment with an attorney. From our law offices in West Palm Beach, Wellington, and Miami, we provide shareholder dispute legal services throughout Southeastern Florida.

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