When Collaboration Turns into Conflict: Why Your Articles and Shareholders’ Agreement Decide Who Wins
When Collaboration Turns into Conflict: Who Really Has Power in Your Business?

Every successful business begins with optimism: aligned founders, shared ambition, and the belief that “we’ll work it out between us.”
But growth, pressure, money and differing visions have a habit of turning collaboration into conflict. When that happens, the question is no longer about trust or relationships – it is about governance architecture.
Where do you actually turn when you are in dispute with your fellow shareholders?
The answer is not “the law” in the abstract. It is your Articles of Association and your Shareholders’ Agreement – and whether they were designed for harmony only, or also for crisis.
Conflict changes the lens
Once a shareholder is also a director, the landscape becomes even more complex. Commercial instincts collide with statutory duties. You may own the company, but you also owe duties to it.
Suddenly the questions become:
- Do the Articles contain deadlock or stalemate provisions?
- Is there a casting vote, escalation mechanism, or forced exit route?
- Are you constrained by fiduciary duties that limit how far you can “fight your corner”?
- Can a majority force decisions through?
- What protections do minority shareholders really have?
- What remedies apply – constitutional or contractual?
And crucially:
Are your rights enforceable through corporate machinery, or only through damages after the damage is already done?
This is why Articles and Shareholders’ Agreements are not just paperwork. They are your conflict-resolution system.
Two documents. Two types of power.
Your Articles of Association are the public constitution. They control voting rights, board authority, share transfers, compulsory transfers, drag and tag, and – in some cases – deadlock mechanisms. Breach can invalidate corporate acts entirely.
Your Shareholders’ Agreement is the private control contract. It regulates veto rights, reserved matters, minority protection, funding obligations, exit triggers, valuation, leaver provisions and dispute resolution. Breach leads to injunctions, damages, forced sales and commercial leverage.
Where a right sits determines not just what happens, but who has power when relationships break down.
Designing for disagreement (not just success)
The real strategic mistake is waiting until conflict exists before thinking about structure.
At the outset – when everyone is aligned – is precisely when you should be asking:
How do we unlock deadlock if we disagree fundamentally?
- Can one shareholder force an exit or a buy-out?
- What happens if a minority blocks strategy?
- How do we protect the business if someone leaves and competes?
- Where does IP actually sit – with the individuals or with the company?
Because once conflict arises, you are no longer negotiating design. You are living with its consequences.
Sector-specific risk: when knowledge is the business
In some sectors, the governance stakes are even higher.
In a recruitment firm, consultancy, tech start-up or design agency, the value often lies in:
- Relationships;
- Know-how;
- Methodology;
- Brand and IP.
If a key shareholder leaves:
- Do restrictive covenants bite hard enough?
- Is IP owned by the company or by the individuals who created it?
- Is that IP registered and protected in the company’s name?
- Could the departing founder walk out with the value?
These are not employment questions. They are shareholder-level risk questions, and they belong in carefully aligned Articles and Shareholders’ Agreements.
The Boardside lens: governance is relationship engineering
At Boardside, we see Articles and Shareholders’ Agreements not as static documents, but as relationship architecture:
- Designed for alignment;
- Engineered for disagreement;
- Enforceable under pressure;
- Protective of long-term value.
The most resilient businesses are not those that assume harmony forever. They are the ones that plan for difference of view, change of strategy, and eventual exit – while everyone is still getting on.
Because when collaboration becomes conflict, your future will not be decided by goodwill.
It will be decided by what you put in place at the beginning.
Please share Boardside's expertise and insights with colleagues and associates. Thank you.
Working closely with you, we can navigate the hurdles you face, to build a stronger business and to achieve commercial advantage. Call us for an initial conversation on 0330 0949338










