What mechanism can I use to resolve a stalemate situation where my...

What mechanism can I use to resolve a stalemate situation where my partners do not want to sell their shareholding?

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In this kind of situation an outside arbitrator can be appointed to try and break the stalemate. Another alternative is to seek legal advice. Without understanding the terms of the shareholder agreement, it is difficult to offer a solution.

A shareholders’ agreement governs the relationship between shareholders. The agreement is necessary to protect the interests of one or more shareholders against the others. While the directors operate the company and make the decisions, they operate only in accordance with the instructions of their shareholders and within the terms of the shareholders agreement. The agreement must be signed by all shareholders to be valid.

It is unclear as whether or not you have used a ready-made agreement or a customised agreement drawn up by a lawyer. “This is another reason to consult a professional advisor is find out what the legal implications may be. Consult a legal firm or a lawyer that specialises in this area,” recommends Johan Brink of Brink, Cohen and Le Roux.

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