Shareholder Disputes 2026: How to handle to protect your rights and interests?

1. Concepts and legal grounds related to shareholder disputes

1.1. Concept of shareholder disputes

Shareholder disputes (or internal corporate disputes) are conflicts regarding rights and obligations between shareholders themselves, or between shareholders and corporate managers (Board of Directors, Director/General Director) related to the company’s operations.

1.2. Legal grounds for shareholder disputes and dispute resolution

The resolution of these disputes is primarily based on the following legal instruments:

– Law on Enterprises 2020, as amended and supplemented in 2025: The highest legal framework governing the organization and operation of companies;

– Civil Procedure Code 2015, as amended and supplemented in 2025: Stipulates the order and procedures for filing lawsuits in Court;

– Law on Commercial Arbitration 2010, as amended and supplemented in 2025: Stipulates out-of-court dispute resolution;

– Company Charter.

2. Common shareholder disputes today and their root causes

Disputes among shareholders in an enterprise typically revolve around core issues of power and interests:

2.1. Disputes over shareholder status and share ownership

Determining the true owner of shares, especially in cases of “nominee” arrangements (holding shares on behalf of another). This type of dispute directly relates to the core interests of investors.

2.2. Disputes regarding resolutions of the General Meeting of Shareholders (GMS) / Board of Directors (BOD)

When a shareholder believes that Resolutions violate the law or infringe upon their interests:

– Claims that adopted Resolutions seriously violated the order and procedures for convening meetings, or that the content of the Resolution directly infringes upon their rights;

– The underlying cause lies in the abuse of power by the controlling shareholder group, where they exploit their voting majority to pass decisions beneficial to their own interest groups while ignoring the voices of other members.

2.3. Disputes over profit distribution policies and dividend payments

Conflicts over economic interests are the most common “detonator” in shareholder relations. Disputes occur when the company generates profit but does not distribute it, or distributes it unfairly, leading to a conflict of interest between the company and its shareholders.

2.4. Disputes over governance rights and appointment of key personnel

Conflicts in the appointment or dismissal of key positions arise when shareholder groups cannot agree on personnel plans or when there is a shift in the balance of power following additional share issuances. Cause: Often due to the Company Charter having unclear regulations on candidate standards or loose voting processes.

2.5. Disputes arising from share transfer activities

Disputes occur when a shareholder secretly transfers shares to outsiders or competitors without complying with the “right of first refusal” of existing shareholders as prescribed in the Company Charter. This not only changes the ownership structure but also threatens trade secrets and the strategic stability of the entire corporate system.

3. Measures for handling shareholder disputes

When a conflict erupts, parties can apply the following resolution methods in order of priority:

3.1. Self-negotiation and mediation

This is the most encouraged method:

– In corporate governance, self-negotiation and mediation are always considered the “golden process” and the top priority when any conflict arises. This method not only helps maintain the business’s existence but also acts as a shield protecting the brand reputation before the public and business partners;

– Instead of direct confrontation at a jurisdictional body, shareholders sit down in an open dialogue to analyze the root cause of the conflict, thereby making concessions on economic interests or governance power to reach a “win-win” solution;

– To ensure enforceability, this process usually concludes with the parties signing a memorandum of agreement. This document serves as vital legal evidence, recording the voluntariness of the parties and acting as a basis for authorities to consider if one party fails to fulfill their commitment in the future.

3.2. Resolution via commercial arbitration

When internal self-regulation efforts fail, resolution through Commercial Arbitration emerges as a modern and highly effective alternative:

– Note that this method is only activated if the parties have established a written “arbitration agreement,” usually recorded in the Company Charter or initial capital contribution agreements;

– Another advantage is the “finality” of the award, meaning parties cannot appeal to higher levels as in Court, thereby significantly shortening time and saving opportunity costs for the business;

– Furthermore, arbitration tribunals often consist of leading experts in economics and corporate law, helping to issue highly professional decisions that are closer to the reality of business operations than standard civil litigation.

3.3. Litigation in court

This is the measure of last resort when parties cannot find a common voice. In such cases, the Court will base its judgment on the Law on Enterprises and the Company Charter to issue a ruling.

4. Risk management and early prevention of shareholder disputes

To limit conflicts and avoid “taking each other to court,” businesses must establish a strict governance system from the outset:

– Drafting a Detailed Company Charter: Do not mechanically use templates. Clearly stipulate voting mechanisms and methods for handling “deadlock” situations;

– Signing a Shareholders’ Agreement (SHA): This is a crucial supplementary document, detailing exit rights, drag-along rights, and tag-along rights;

– Financial Transparency: Establish internal control systems and independent audits. Perform periodic audits and clear reporting to avoid internal suspicion causing unnecessary conflict;

– Scientific and Compliant Record-Keeping: Shareholder registers, GMS minutes, and other relevant documents must be prepared and archived according to regulations.

5. Potential risks of prolonged shareholder disputes

If not resolved definitively, the business will face severe consequences:

– Important business decisions cannot be passed due to an inability to conduct votes;

– Dispute information leaks out, causing partners and customers to lose trust;

– Internal staff become anxious; senior personnel may doubt the stability and leave the company;

– Litigation costs are expensive, and company assets may be frozen due to the application of interim injunctive measures.

6. Consulting services for the prevention and handling of shareholder disputes from Lexconsult & Partners

With practical consulting experience for many clients, Lexconsult & Associates provides services to prevent and handle shareholder disputes in accordance with legal regulations and specific needs, minimizing arising legal risks.

Scope of services includes:

– Reviewing and assessing risks from Company Charters and capital contribution contracts;

– Negotiation Representation: Participating as a third party to coordinate mediation between shareholder groups;

– Drafting Lawsuit Files: Preparing evidence and petitions, and participating in proceedings for cases resolved through Court or Commercial Arbitration;

– Restructuring Advice: Assisting with share buyback procedures or corporate demergers to terminate disputes.

7. FAQ – Frequently asked legal questions regarding shareholder disputes

Can a minority shareholder sue company managers?

=> Yes. According to Article 166 of the Law on Enterprises 2020 (as amended 2025): Shareholders or groups of shareholders owning at least 01% of total ordinary shares have the right, on their own or in the name of the company, to initiate lawsuits for individual or joint liability against members of the Board of Directors, the Director, or the General Director to request the return of benefits or compensation for damages.

Can a passed Resolution of the General Meeting of Shareholders be annulled?

=> Yes. According to Article 151 of the Law on Enterprises 2020 (as amended 2025): Within 90 days from the date of receiving the resolution or minutes of the GMS meeting or the results of a written opinion poll, shareholders or groups of shareholders specified in Clause 2, Article 115 of this Law have the right to request the Court or Arbitration to consider and annul the resolution or part of its content if it falls under the cases prescribed in Article 151.

Are shareholders free to transfer shares to outsiders?

=> For Founding Shareholders: Within the first 3 years from the date of the Business Registration Certificate, transfers to non-founding shareholders must be approved by the GMS.

=> After that period: Shareholders are free to transfer, unless the Company Charter stipulates restrictions (which must be clearly stated on the share certificates).

When a dispute occurs, will the company’s bank accounts and assets be frozen?

=> Potentially. If a party files a lawsuit in Court and requests Interim Injunctive Measures, the Court may issue a decision to freeze accounts or suspend transactions of disputed assets to ensure future judgment enforcement. This is a very high risk that can paralyze business operations, which parties must anticipate.

Please contact Lexconsult & Partners if you have any questions regarding shareholder dispute resolution to receive detailed legal advice, risk assessments, and support in resolving matters in accordance with legal regulations.

📞 Hotline: 0938 507 287

📩 Email: info@lexconsult.com.vn