Unfair Prejudice Claims Solicitors
In a business, the Shareholders’ Agreement and/or Articles of Association outline the voting requirements for certain decisions. And yet, shareholders frequently disagree on decisions of the company.
What is unfair prejudice?
Unfair prejudice is where a company’s affairs have been, or will be, carried out in a way that unfairly prejudices the business’s members or a part of the membership, including at least the petitioner.
Often, the majority shareholders carry out these affairs in a way that unfairly prejudices the interests of the minority shareholders.
In the event of a dispute, a minority shareholder is unlikely to have the required votes in their favour. After a number of these disputes, the minority shareholder can feel as if they have shares in a business that they have no say over.
Making an unfair prejudice claim
As a minority shareholder, you have rights if you are being prevented from running your business. In short, you can apply to the court for relief if the affairs are conducted in a manner that is unfairly prejudicial to your interest as a shareholder.
Unfair prejudice claims are brought under section 994 of the Companies Act. The court has wide powers and can order the majority shareholder to purchase the minority shareholder’s shares, ignoring any minority discount.
Majority shareholders will also need to ensure that they are not opening themselves up to an unfair prejudice claim. The court has, in exceptional circumstances, ordered the majority shareholder to sell its shares to the minority shareholder.
The minority shareholder will need to send a petition to the court, evidencing that the conduct or act is unfairly prejudicial. They will need to prove that it is not merely a disagreement or a bad commercial decision.
Read more about shareholders’ rights here.
Contact us about making an unfair prejudice claim
In unfair prejudice claims, the court will consider the promptness of any application from the date of the act. If you believe you are being unfairly prejudiced, you should therefore seek legal advice immediately, before making any application.
We advise clients across the UK from our offices in Bedminster, Bishopston, Bristol city centre, Kingswood and Thornbury.
For straightforward advice about an unfair prejudice claim, speak to our commercial dispute lawyers in Bristol. Call 0117 325 2929 or complete our online enquiry form.