This article is for company directors, shareholders, and business owners in Ireland dealing with a shareholder who has agreed to transfer shares but refuses to sign the necessary documents.
If you're stuck because someone won't complete a share transfer they've already agreed to, this guide covers your legal options including court orders for specific performance, the oppression remedy under Section 212, and rectifying the register of members.
Key Takeaways
Courts can order specific performance to force shareholders to complete agreed share transfers when damages are inadequate.
Section 212 allows courts to remedy oppressive conduct, including ordering obstructive shareholders to sign transfer documents.
Include drag-along rights and deadlock-breaking mechanisms in your constitution to prevent shareholder obstruction before it occurs.
Attempt mediation before court proceedings—it resolves disputes in weeks versus 12-18 months and produces more flexible solutions.
Gather documentary evidence immediately: shareholders' agreements, refusal correspondence, board minutes, and formal written requests with deadlines.
Laura Ryan is a practising Barrister at the Bar of Ireland. She graduated from the Honourable Society of King’s Inns in 2024, having previously qualified and practised as a Chartered Accountant in a big four accounting firm.
Can the court force a shareholder to sign transfer documents they've agreed to?
Yes, the court has power to compel completion of transactions where shareholders have agreed but refuse to sign. The Companies Act 2014 gives courts broad authority to make orders directing the exercise of powers where shareholders are being obstructive, particularly when they've agreed to transactions but won't complete them.
What is specific performance and when can I get it for share transfers?
Specific performance is an equitable remedy that forces parties to complete contracts when money damages wouldn't adequately compensate for the breach. Courts recognize that shares in private companies often have unique characteristics—like specific voting rights or preferences—that make them irreplaceable, so specific performance is typically available for shareholdings in closely-held companies.
Can I use Section 212 if another shareholder refuses to sign agreed documents?
Yes, Section 212 provides relief where company affairs are conducted in a manner oppressive to members, and a shareholder refusing to sign agreed documents may constitute oppressive conduct. The court has wide powers to remedy the oppression, including ordering the company or any member to do or refrain from doing any act, or requiring purchase of shares by other members or the company itself.
How do I rectify the register of members if someone won't sign a transfer?
You can apply under Section 173 to rectify the register when a name is wrongly entered or omitted. You'll need to show that the register doesn't reflect the true position—typically with evidence of an agreement to transfer shares—and demonstrate that the shareholder's refusal has resulted in wrongful non-entry of the transferee's name.
Can I use written resolutions to bypass a shareholder who's blocking decisions?
Written resolutions can sometimes avoid the need for unanimous consent, but they require over 50% for ordinary resolutions and 75% for special resolutions, and must be circulated to all members entitled to vote. However, your company constitution may require higher thresholds or restrict their use in certain situations, and certain matters cannot be dealt with by written resolution at all.
Should I try mediation before going to court over a shareholder dispute?
Yes, mediation offers significant advantages—it can resolve disputes within days or weeks compared to court cases that take 12-18 months to reach trial, saving substantial legal costs. Many shareholders' agreements include mandatory mediation clauses that courts will enforce, and even without one, courts increasingly expect parties to consider mediation before commencing shareholder disputes. Failed mediation doesn't prevent subsequent court applications, and all discussions remain confidential.
What evidence do I need to bring a court application for a refused share transfer?
You'll need documentary evidence of the agreement to transfer shares, including the original shareholders' agreement or contract, correspondence showing refusal, board minutes or resolutions approving the transaction, and formal written requests with clear deadlines. Include all correspondence and responses (or non-responses demonstrating refusal) and contemporaneous notes recording conversations or meetings about the refusal.
How can I protect my company against shareholder obstruction in the first place?
Well-drafted company constitutions should include protective provisions like drag-along rights (allowing majority shareholders to force minority share sales), tag-along rights (protecting minority shareholders in sale scenarios), and pre-emption provisions regulating share transfers. Include deadlock-breaking mechanisms and dispute resolution clauses requiring mediation before court proceedings to prevent these situations from arising.
Who pays the legal costs if I have to take a shareholder to court?
Under standard court rules, costs typically follow the event—meaning the unsuccessful party usually pays the successful party's costs. Courts can order costs against shareholders acting unreasonably, but you should commence proceedings promptly after refusal becomes clear, as delay may prejudice your position and affect costs awards.
