Frequently Asked Questions

UK: What should I do if shareholder threaten to issue an “unfair prejudice” petition under the UK’s Companies Act?

One of the most common legal actions taken in the UK by shareholders in respect of a shareholder dispute is to issue an “unfair prejudice” petition under the UK Companies Act 2006. This allows the shareholder to seek relief where they believe their interests have been unfairly prejudiced by the actions of the company’s management or other shareholders. This could include actions such as the appointment of a director without shareholder consent, exclusion of the shareholder from management decisions or breach of an agreement to consult with or provide information to a shareholder. 

If a petition is threatened or presented it is crucial to seek legal advice promptly so the company can develop an appropriate strategy for responding to the claim. Documents and evidence should be preserved. It may be necessary for the company and the majority shareholders to seek separate advice. If it is possible to resolve the dispute without it going to court this will usually be more cost-effective and less damaging to the company’s reputation.

Learn More: UK Founder Series: Navigating Shareholder Disputes in the UK