Why court is the worst place to divide company profits
A judge doesn't know your company and probably will never understand it as well as you do. When partners go for the jugular, only the law firms really win, while your business simply stands still and loses value. At Forum Sovereignty, we see every day how three years in court destroy small companies, while mediation closes the topic in 21 days.
Three years on hold costs more than a lawyer
A case regarding the division of profits or dividend payments in Warsaw commercial courts lasts an average of 34 months. During all this time, no one can legally pay out money, and all key investments are frozen. We saw a case of a small printing house in Wola, where a dispute over the amount of 140,300 PLN blocked the purchase of a new offset machine for two full seasons. The company lost 4 large contracts worth a total of 87,500 PLN because it lacked processing capacity. Instead of making money, the partners spent 3 years exchanging pleadings that contributed nothing to the business development.
In mediation, the situation looks completely different because facts matter, not emotions. We sit down at the table and usually in 2 or 3 specific sessions we determine who takes how much and on what terms. We don't waste time on personal trips or analyzing history from a decade ago. We focus on making the company operational again. Most of our cases in 2024 ended with the signing of a settlement in less than 24 business days. This allows you to unblock the company account and return to work before the competition takes over your clients.
It is also worth remembering the opportunity costs. The time you spend at a lawyer's office preparing for a hearing is time you are not building sales. For the owner of a small company that employs 7 or 12 people, every hour spent in court is a real loss of 450-800 PLN in revenue. After three years of fighting for what's right, it may turn out that you won the trial, but the company is already just a shell without employees and orders. Without going to court, you save not only money but also the structure you built for years.
A court judgment often comes when the company has nothing left to divide because the market has moved forward.
Hidden invoices for fighting for rights before a judge
Legal representation is just the beginning of real expenses that lawyers don't always mention at the first meeting. In a dispute over 200,000 PLN, court fees alone are a round 10,000 PLN to start. On top of that, there are court experts for share valuation or accounting analysis. One expert last year charged from 3,200 PLN to even 6,700 PLN for one opinion, which in Warsaw takes an average of 7 months to receive. If one of the partners submits objections to the opinion, the court will appoint a second expert and the meter starts ticking again.
At Forum Sovereignty, we apply clear 50/50 rules when sharing the costs of repairing the company structure. Our mediation cost is known in advance and usually closes at 4,800 PLN for the entire process, including the preparation of a new company agreement. This is a fraction of what years in court consume. Additionally, a settlement concluded before a mediator and approved by the court has the same legal force as a judgment, but it is created with your consent, rather than by imposing the will of a judge who sees you for the first time.
It is also necessary to mention the emotional costs, which in small companies translate into management errors. When partners are in open conflict, employees feel it. In one of the logistics companies we served, during 9 months of court dispute, 3 key forwarders left. The cost of recruiting and onboarding new people cost them over 42,000 PLN. No one will return this money to them in court, even if they win the main case for profit sharing. Mediation allows the conflict to be extinguished before it burns the entire organization from the inside.
Fees for experts and representation costs consume an average of 23% of the disputed amount within the first two years of the trial.
We repair the share structure instead of destroying it
A judge is not there to fix your company agreement. A judge is there to issue a judgment: to state whether a given resolution was valid or whether someone should pay a specific amount. In business, this rarely solves the problem, because after the judgment, the partners still have to cooperate with each other within the same, flawed structure. We at Forum Sovereignty act differently — we repair the share structure so that the payout and decision-making mechanism is automatic and resistant to future quarrels.
In October 2024, we worked with a software house from Lublin. They had a classic 50/50 decision-making deadlock that had lasted for 14 months. We changed the entries in the National Court Register and implemented a new statute within 19 business days. We introduced clear investment exit rules that no court would ever propose, because a judge strictly follows the commercial companies code. We add market realities to it. Thanks to this, we managed to save a team of 8 specialists who already had offers from the competition on their desks.
Sometimes the only sensible solution is for the partners to part ways. In court, this takes years and involves a painful liquidation of assets by a bailiff. In the mediation process, we are able to establish a repayment plan for one of the partners spread over, for example, 14 installments, which allows the company to maintain financial liquidity. The court will not spread your payments into installments tailored to your seasonal income — the judge will issue an immediate payment order, which for many companies in the SME sector simply means bankruptcy.
Why a judge won't understand your daily toil
For the court, only hard paragraphs and documentary evidence count. The judge is not interested in the fact that one partner worked 12 hours a day for the last 3 years, while the other only answered phones and took care of private matters during that time. If in the paperwork both have 50% shares, the court will divide the profit equally. Mediation allows these issues to be laid out on the table without recording every spiteful remark and finding a solution that both parties consider fair, and not just in accordance with the letter of the old agreement.
We focus on what should happen tomorrow, not on ruminating over who insulted whom at a meeting in July 2022. One of our recent cases concerned a construction materials wholesaler. The emotions between the owners were so high that they had not spoken to each other directly for over 4 months. After 5 hours of moderated conversation with us, they established an internal debt repayment plan for the amount of 23,400 PLN per month. A court judgment would likely lead to an auction of goods in the warehouse, which would destroy supplier relationships built over 8 years.
Heads-up: mediation is not group therapy. It is hard business negotiation conducted by people who understand the balance sheet and profit and loss account. At Forum Sovereignty, we don't promise miracles — if we see that one party only wants to destroy the other, we honestly say that mediation will not help here. But in 83% of cases that investors bring to us, we manage to find a point of contact. Facts matter, not emotions, and that is the key to saving your capital.
When is it worth letting go of the court path?
Most dividend disputes in limited liability companies result from imprecise provisions regarding so-called voluntary redemption of shares or the lack of a clear profit reinvestment policy. If your company agreement is more than 5 years old, it probably doesn't fit today's tax and market realities. Instead of paying 15,000 PLN for a court entry, it's better to allocate these funds for an agreement audit and a mediation session. From our experience, 7 out of 10 conflicts can be resolved through a simple correction of the statute and adding a 'deadlock' mechanism in case of a voting tie.
Remember that once a court process has started, it is very difficult to stop it without financial losses. Each side digs into their positions, and costs grow with each month. If you feel that trust between you and your business partner has dropped by 30-40%, this is the last moment for mediation. Waiting until the conflict escalates to the level of notifications to the prosecutor's office or tax audits is a straight path to closing the business. We act so that you don't have to choose between court and bankruptcy.
Finally, a small note: mediation is confidential. What you say during the meeting cannot be used against you in court if a settlement is not reached. This gives great comfort for honest talk about money, which you cannot count on in the courtroom, where every word goes into the public record. For many of our clients, especially those from smaller towns, discretion is worth more than savings on experts. We protect your reputation as strongly as your wallets.
Mediation confidentiality is the strongest shield for your business reputation.
