Few things cause more stress for a business owner than a shareholder dispute. You may have built a successful company with trusted partners but when one of those partners refuses to cooperate in a share transfer or exit, things can quickly turn tense and uncertain.
Maybe the partnership just isn’t what it used to be. When a shareholder refuses to cooperate, the fallout can ripple through your whole business — morale drops, decisions stall, and financial progress can grind to a halt. It’s stressful, frustrating, and often deeply personal.
But here’s the good news: you’re not the first business owner to face this — and you don’t have to face it alone.
At Kinore, we’ve helped Irish SMEs untangle tricky ownership situations. In this article, we’ll walk you through the key steps to take when a shareholder won’t coperate and, just as importantly, how to protect your business so you don’t end up here again.
1. Start with the Shareholders’ Agreement (SHA)
Your first stop should always be your Shareholders’ Agreement (SHA). This document exists precisely for moments like this.
Most well-drafted Shareholders’ Agreements will outline what should happen if someone wants to sell their shares — or has to.
In many cases, the agreement will give the company or other shareholders a clear process to follow, so that one person can’t hold things up unfairly.
For example, it might say that:
- If most shareholders agree to sell the business, the others must go along with that decision, or
- If someone wants to sell their shares, the others have the right to buy them first on fair terms.
Some agreements also cover situations like a shareholder leaving the business, becoming insolvent, or breaching their duties. In these cases, the agreement may allow the company to step in and arrange a transfer of those shares to keep things running smoothly.
If your agreement includes these kinds of clauses, you may already have a clear path forward to resolve the issue without needing to take legal action.
What if there’s no Shareholders’ Agreement?
We see this often, especially in early-stage or family-run businesses.
When relationships are strong and trust is high, a formal SHA can feel unnecessary. Many founders understandably want to avoid legal costs or difficult “what-if” conversations early on.
But the reality is that not having a Shareholders’ Agreement can become a costly mistake later. Without a precise mechanism for exit or dispute resolution, the business can end up in deadlock, with no easy legal route forward.
If you don’t currently have an SHA in place, this is a good moment to review your company’s structure and protect against future disputes. A relatively modest investment in professional drafting can save significant cost, time, and stress down the line.
2. Check Your Company Constitution
If your SHA doesn’t provide a solution—or if you don’t have one—your Company Constitution is the key document to review.
The constitution usually sets out the formal rules governing your company’s operations, including how shares can be issued, transferred, or forfeited.
In some cases, it may also outline specific procedures for compulsory transfers in particular situations, such as:
- The death or incapacity of a shareholder
- Insolvency or bankruptcy
- A shareholder leaving employment with the company
- Breach of the company’s rules or obligations
When reviewing your constitution, pay close attention to:
- Transfer procedures: who must approve a transfer, and in what form
- Notice requirements: any formal written notices that must be served
- Timelines: deadlines or steps to follow in sequence
Every step you take must follow the correct legal and procedural process. Acting outside the scope of your constitution can leave the company open to challenge and potentially render any transfer invalid.
At this stage, it’s wise to involve professional advisors who understand both the legal and financial implications of your next move. At Kinore, we often work hand in hand with clients’ solicitors to ensure that the finance and tax considerations are taken into account alongside the legal steps.
3. Consider Legal Action (as a Last Resort)
If neither your Shareholders’ Agreement nor your Company Constitution provides a workable solution, you may have to consider legal action but this should truly be the final option.
Under Irish company law, it is sometimes possible to apply to the Court to compel a transfer of shares. This route typically involves demonstrating that the shareholder is acting oppressively or unfairly to other shareholders or to the company.
However, court proceedings can be:
- Expensive: with legal fees that can quickly escalate
- Time-consuming: potentially taking months or even years
- Public: meaning sensitive company information could become part of the public record
Before going down this path, explore every possible alternative resolution:
- Mediation or facilitated negotiation
- An independent valuation and buyout offer
- Revisiting the terms of the transfer for mutual benefit
Legal enforcement can provide closure, but it often comes at a steep price. For most SMEs, maintaining goodwill — even in a strained relationship — is far more valuable in the long term.
4. Begin with the End in Mind
One of the best pieces of advice we share with clients is this:
Begin with the end in mind.
It’s a principle that applies to shareholder relationships as much as it does to strategic planning or tax structuring.
When everyone is getting along, it’s easy to assume that disputes will never arise. But just like insurance, a solid Shareholders’ Agreement and well-considered company constitution exist for peace of mind — not because you want to use them, but because you’ll be grateful to have them if the worst happens.
If your business is growing or taking on new shareholders, it’s worth taking time now to review:
- What happens if someone wants to leave the business
- How shares will be valued and transferred
- Who has decision-making power in a dispute
- What exit provisions are in place for founders, investors, or key employees
Addressing these questions early builds long-term stability and protects all parties involved.
5. Avoiding Future Deadlock: Practical Steps for Irish SMEs
At Kinore, we help business owners across Ireland prepare for growth and protect what they’ve built.
Based on our experience, here are a few practical steps to avoid shareholder deadlock:
- Put a robust Shareholders’ Agreement in place — and update it as your business evolves.
- Align expectations early around roles, responsibilities, and ownership intentions.
- Plan for exits — even when no one’s thinking of leaving. Clear valuation methods and buyout mechanisms are key.
- Maintain open communication between shareholders, especially when changes or challenges arise.
- Seek professional guidance before making any moves that affect ownership, taxation, or governance.
Taking these steps now can prevent difficult conversations later — and ensure your company remains strong, stable, and future-focused.
Key Takeaway
Shareholder disputes are delicate, and emotions often run high. The key is to pause before acting and ground your decisions in the correct documents — your Shareholders’ Agreement and Company Constitution.
Avoid unilateral actions that could later be challenged. Instead, take advice, review your legal footing, and move carefully through the correct procedures.
And most importantly, remember: a good Shareholders’ Agreement isn’t just a legal safeguard — it’s a symbol of trust, transparency, and good governance within your business.
Need Support? We’re Here to Help.
If you’re dealing with a shareholder dispute—or want to ensure your business is adequately protected for the future—our team at Kinore can help.
We work with Irish SMEs across all sectors to provide clear, practical advice on company structure, shareholder management, and long-term financial planning.
Book a Discovery Call with our Client Services Team today to discuss your situation in confidence and explore your next steps.
