The Accountant: Shareholder and Partner Disputes – How did it come to this?
19 / 01 / 2023
Partner Edward Starling discusses shareholder and partner disputes in the accountancy sector and the limited number outcomes available when they are escalated, published in The Accountant.
Whether an accountancy practice is dealing with its own internal issues or where accountants are the first port of call for clients, without careful management shareholder / stakeholder issues can have a hugely detrimental impact on the underlying business.
There are a limited number of categories of outcome for escalated shareholder / partner disputes including: broad agreement is reached and an uncomfortable (sometimes) status quo persists (or this is ordered by the court); a buy out or, in the case of a partner, a partner(s) / team leaves; the business fails and value is lost (or the deadlock is so severe that the court liquidates the entity as there is no viable alternative path); or insolvency laws are also sometimes be used to start a new business entity without the constraints or debt history of the existing vehicle. Given those outcomes, real care is needed to ensure rational and unemotional decisions are made to achieve the desired objective and to preserve the value and integrity of the business.
The current head winds faced in the UK on every level are certain to cause these issues to rise to the surface in the short to medium term…
To read the full article please click here. (£)