Shareholder and Partnership Disputes

Shareholder Dispute Lawyer Sydney: Shareholder and Partnership Disputes

When business owners fall out, the law gives minority shareholders and partners real remedies. A shareholder can ask the court to stop oppressive conduct, order a buy-out or even wind up the company. A partner can ask the court to dissolve the partnership and have its assets applied to its debts and then divided.

Reviewed by Sam Saadat, Principal Lawyer, Invictus Legal. Last reviewed: 7 October 2026

Invictus Legal is a Sydney firm specialising in commercial disputes. As an experienced shareholder dispute lawyer in Sydney, we act for minority and majority shareholders, directors and partners in deadlocks, exclusion from management, profit disputes and exits. This page forms part of our commercial law practice.

What is the oppression remedy?

The oppression remedy lets a member ask the court to intervene when a company's affairs are run unfairly against them.

Under the Corporations Act 2001 (Cth) s 232, the court may make orders if the conduct of the company's affairs, an act or omission, or a resolution of members is contrary to the interests of the members as a whole, or is oppressive to, unfairly prejudicial to, or unfairly discriminatory against a member. Common examples include excluding a shareholder from management, diverting business opportunities, paying excessive director fees, or refusing to pay dividends while insiders take the profits.

Under s 234, an application can be made by a member, a former member (about the circumstances in which they ceased to be a member), a person to whom shares have been transmitted by will or by operation of law, or a person ASIC thinks appropriate.

What orders can the court make in a shareholder dispute?

Section 233 allows the court to make any order it considers appropriate, including orders:

• that the company be wound up;

• modifying or repealing the company's constitution;

• regulating the conduct of the company's affairs in the future;

• for the purchase of any member's shares (the most common outcome, a court-ordered buy-out);

• for the company to bring, defend or discontinue proceedings, or authorising a member to do so in the company's name;

• appointing a receiver or receiver and manager;

• restraining a person from specified conduct, or requiring a person to do a specified act.

Can a company be wound up because of a shareholder dispute?

Yes. The court may order a company be wound up if it is of the opinion that it is just and equitable to do so (Corporations Act 2001 (Cth) s 461(1)(k)).

Section 461(1) also allows winding up where directors have acted in their own interests rather than those of members as a whole, or where affairs are conducted oppressively or in a manner that is unfairly prejudicial to members. Winding up is a drastic remedy, usually sought where trust between the owners has broken down completely, such as in a deadlocked two-shareholder company.

What is a statutory derivative action?

A statutory derivative action allows a member or officer to sue on behalf of the company, usually against directors who have harmed it, but only with the court's leave.

Under s 236 the proceedings are brought in the company's name. Under s 237(2) the court must grant leave if it is satisfied that the company is unlikely to bring the proceedings itself, the applicant is acting in good faith, leave is in the company's best interests, there is a serious question to be tried, and the applicant gave the company at least 14 days' written notice (or it is appropriate to grant leave without notice). See also our page on directors' duties claims.

Can I inspect the company's books?

Yes. A member can apply to the court for an order to inspect the company's books under s 247A.

The court may only make the order if satisfied that the applicant is acting in good faith and the inspection is for a proper purpose. Inspection is often the first step in a shareholder dispute, because it reveals whether money is being diverted or decisions are being hidden.

How do the shareholders agreement and constitution affect my dispute?

They are usually the first documents we read, because they often set out exit rights, deadlock procedures and valuation methods.

Under s 140, a company's constitution and any replaceable rules that apply to it operate as a contract between the company and each member, and between the members themselves. A shareholders agreement is a separate contract that commonly deals with pre-emptive rights, drag and tag rights, dispute resolution and buy-out formulas. If you do not have one, our shareholder and partnership agreements service can help prevent the next dispute.

How are partnership disputes resolved in NSW?

Partnership disputes are governed by the partnership agreement and the Partnership Act 1892 (NSW), which allows the court to dissolve a partnership on specified grounds.

• Partnership at will: where no fixed term was agreed, any partner may end the partnership by giving notice to all other partners (s 26).

• Automatic dissolution: subject to the partnership agreement, a partnership is dissolved on expiry of a fixed term or completion of a single venture (s 32), and by the death or bankruptcy of a partner (s 33).

• Dissolution by the court (s 35): grounds include a partner's permanent incapacity, conduct calculated to prejudicially affect the business, wilful or persistent breach of the partnership agreement, the business only being able to be carried on at a loss, and where it is just and equitable.

• Winding up the assets: on dissolution, each partner can require partnership property to be applied to pay the firm's debts and liabilities, with the surplus distributed among the partners (s 39).

Which court hears shareholder disputes?

Most shareholder disputes in Sydney are heard in the Corporations List of the Equity Division of the Supreme Court of NSW, or in the Federal Court of Australia.

Both courts have jurisdiction under the Corporations Act 2001 (Cth) (s 58AA and s 1337B). Invictus Legal appears in the Supreme Court and in courts across Sydney and NSW. If assets are at risk of being moved, we can seek freezing orders.

What does it cost?

Cost depends on the size of the business, how many shareholders or partners are involved, whether valuation evidence is needed, and whether the matter resolves early. Many disputes settle through a negotiated buy-out once both sides have advice. Fees for commercial matters are determined by the scope of work involved, and we issue a costs agreement before we commence any work, so you have full transparency from the start.

Frequently asked questions

What is oppressive conduct by a company?

Under the Corporations Act 2001 (Cth) s 232, conduct is open to challenge if it is contrary to the interests of the members as a whole, or oppressive to, unfairly prejudicial to, or unfairly discriminatory against a member. Examples include excluding a shareholder from management or diverting profits to insiders.

Can the court force the other shareholders to buy my shares?

Yes. Among the orders available under s 233 is an order for the purchase of any member's shares. A court-ordered buy-out is one of the most common outcomes in oppression proceedings.

Can I sue a director on behalf of the company?

Yes, but only with the court's leave under ss 236 and 237. The court must be satisfied of matters including that the company will probably not sue itself, you are acting in good faith, it is in the company's best interests and there is a serious question to be tried. You ordinarily need to give the company at least 14 days' written notice.

Do I have a right to see the company's financial records?

A member can apply to the court for an order to inspect the company's books under s 247A. The court must be satisfied that you are acting in good faith and the inspection is for a proper purpose.

How do I end a business partnership in NSW?

If no fixed term was agreed, any partner may end the partnership by notice to the other partners (Partnership Act 1892 (NSW) s 26). Otherwise the court may order dissolution on grounds in s 35, including persistent breach of the partnership agreement or where it is just and equitable. Check your partnership agreement first, as it may change these rules.

Talk to a shareholder dispute lawyer in Sydney

Call Invictus Legal on 02 8553 0500, or 0410 600 230 for urgent matters such as urgent injunctions or freezing orders, or book a consultation online.

This page is general information only and is not legal advice. Contact Invictus Legal to discuss your situation.