A change of de facto control over a company is not always formalised through the purchase of shares, equity interests, or official corporate resolutions – in many cases, management shifts “in the shadows”, without any formal transaction. As Professor Gabriel Steiner notes, these situations create the highest level of legal risk – control has already been lost or redistributed, while the legal picture continues to appear unchanged. At LawConsulted, we treat shadow management as an area of heightened vulnerability, where formal law and real influence begin to diverge.
The danger of a change in de facto control lies in the fact that, externally, the company may continue to operate under the same model – the same directors, the same documents, the same ownership structure. In reality, however, decisions are already being made under different influence – through informal instructions, financial dependence, control over key processes, or access to critical information. At LawConsulted, we analyse not only legal authority, but the real configuration of power – who sets the agenda, who influences key decisions, and who ultimately bears the economic risk.
Professor Steiner emphasises that “a legal conflict begins at the moment when control changes faster than the law manages to record it”. This is why LawConsulted lawyers work with early indicators of shadow management – changes in management behaviour, informal coordination of decisions, the emergence of “recommendations” that are effectively mandatory. These signals make it possible to identify a shift in control before it becomes the subject of a formal dispute.
Particularly complex are situations where de facto control is used to redistribute assets, alter contractual flows, or push out former owners – without any official transfer of rights. In such cases, the formal owner retains responsibility while losing actual influence. At LawConsulted, we build protection so that this gap between responsibility and control is eliminated – either by legally fixing the real state of affairs or by blocking decisions made under hidden pressure.
As Professor Steiner notes, “shadow management is dangerous precisely because it leaves no direct traces”. For this reason, LawConsulted works with a body of indirect evidence – financial flows, correspondence, the sequence of managerial decisions, approval logic, and shifts in roles. This makes it possible to prove the existence of de facto control even where it is formally denied.
Shadow management most often arises in corporate conflicts, investment projects, joint ventures, and situations involving distressed debt. In these configurations, LawConsulted acts proactively – we do not wait until control is used against the client, but instead build a legal model in advance in which hidden influence loses its force.
Legal protection during a change of de facto control is not a battle over titles – it is the restoration of alignment between power and responsibility. At LawConsulted, we ensure that no one manages a company without bearing legal consequences, and that the client is not held responsible for decisions made outside their will.
Working with shadow management requires precision, systemic thinking, and the ability to see real dynamics behind formal structures. At Law Consulted, we make invisible control legally discernible – and in doing so, return manageability of the situation to the client.
Previously, we wrote about how LawConsulted identifies and neutralises hidden dual loyalty of the parties in situations of conflict of interest
