Shareholder Dispute

A shareholder dispute (Gesellschafterstreit) describes any serious conflict between the holders of a company's shares – particularly in a German GmbH, the GmbH & Co. KG and partnerships. Triggers typically include divergent strategic views, conflicts over management, disagreements about profit distribution or accusations of breach of fiduciary duty.

German law provides shareholders with a wide range of instruments: information and inspection rights, actions to challenge or declare void shareholder resolutions, exclusion of a shareholder for cause (§ 140 HGB by analogy or § 34 GmbHG in conjunction with the articles of association), redemption of shares, as well as the assertion of damages claims against fellow shareholders or management (actio pro socio).

Once a dispute escalates, parallel proceedings before the regional court (chamber for commercial matters) and, where appropriate, interim injunction proceedings are typically required. Given the economic significance and at times existential implications for the company, early strategic advice that examines the articles of association, shareholders' agreement, managing director service contracts and tax consequences holistically is highly advisable.