What are the consequences of a breach of my articles of association?
July 13, 2023 | 30,00 EUR | answered by Chloé Schmitt
Dear lawyer,
I am writing to you today because I have some concerns regarding my partnership agreement. I am a partner in a company and have recently discovered that my business partner has violated several clauses in the partnership agreement. Among other things, he has made financial decisions without consulting me and has conducted personal business alongside the company, which is a breach of our contract.
These violations of the partnership agreement are causing me great concern, as I fear they could have negative effects on the company and my stake in it. I am wondering what specific consequences such a violation of the partnership agreement could have and how I should best handle this situation.
Could you please advise me on what legal steps I can take in such a case to protect my interests and enforce the breaches of the contract? Are there ways to amend or adjust the contract to avoid future conflicts? What specific actions do you recommend for me to strengthen my position as a partner and ensure compliance with the partnership agreement?
I thank you in advance for your support and advice on this matter.
Sincerely,
Leon Schottmann
Dear Mr. Schottmann,
Thank you for your inquiry regarding your concerns about the articles of association of your company. It is understandable that you are worried about the breaches of the contract by your business partner and the possible implications for your company and your stake. In such cases, it is important to take appropriate action to protect your interests and ensure compliance with the contract.
First and foremost, it is important to understand the specific consequences that a breach of the articles of association can have. Typically, breaches of the contract by a shareholder are legally impermissible and can lead to legal consequences. Depending on the nature of the breach, as the affected shareholder, you may take various legal steps to protect your interests.
In your case, if your business partner has made financial decisions without consulting you and conducted personal business alongside the company, you could, for example, file a breach of contract lawsuit against him. In this regard, it is advisable to seek legal advice to understand the legal options and consequences of such a lawsuit.
Furthermore, there is the possibility of amending or adjusting the articles of association to avoid future conflicts. It is advisable to negotiate with your business partner and, if necessary, involve a lawyer to ensure that the contract terms are fair and clear for both parties.
To strengthen your position as a shareholder and ensure compliance with the articles of association, I recommend regularly reviewing the business activities of the company and responding appropriately to any violations. Keep all agreements in writing and document all breaches to be able to present evidence in case of a legal dispute.
Finally, I would recommend that you promptly contact a specialized corporate lawyer to discuss your specific situation and receive individual advice. This is the only way to ensure that your interests are adequately represented and that the breaches of the articles of association are appropriately addressed.
I hope this information helps you and I am available for any further questions.
Sincerely,
Chloé Schmitt, Corporate Lawyer
