(2) Without prejudice to the generality of paragraph 1, the court injunction – In the absence of clear provisions in a shareholders` agreement or statute, many minority shareholders are surprised to find that rights can be very limited. After the withdrawal from the European Union on 31 January 2020, the United Kingdom is now in a transition period during which it hoped to negotiate a new agreement with the EU in order to settle its future relationship. This transitional period is coming to an end quickly and no agreement has yet been reached. The more time passes, the more likely it is that the UK will leave the EU without a […] For example, if directors repeatedly violate their obligations or pay each other bonuses while refusing to pay dividends, this probably affects all shareholders in the same way, but could still allow a shareholder to launch a petition against unfair prejudice. Examples of an unfair adverse situation for shareholders are (but not limited): Of course, there is a better option. Instead of ending up fighting costly unfair damage or, even worse, having to deal with a fair and equitable liquidation application, shareholders would be well advised to establish, at the beginning of their business relationship, an adequate statute and shareholders` agreement before a dispute takes place. In this way, if things go wrong, there is already a clear way forward. It`s both cheaper and significantly less stressful than the alternative! If you`re an angry minority shareholder but don`t have a shareholders` agreement, you don`t have to panic; The Companies Act 2006 offers you some protection. It is useful to verify whether the injuring party`s conduct is consistent with the articles and powers conferred by shareholders on the board of directors. It will be difficult to obtain a petition against unjust prejudice if the problems and behaviours complained of fall within the statutes.

“Unfairly prejudicial” is deliberately imprecise language, chosen by Parliament because its earlier attempt, at page 210 of the Companies Act of 1948, to appeal similarly, had been interpreted too narrowly. The previous section had used the word “oppressive”, which the House of Lords in the Scottish Co-operative Wholesale Society v. Meyer [1959] AC 324 said it means “painful, harsh and illegitimate.” This led to some uncertainty as to whether “illegally” required genuine illegality or infringement of legal rights. The Jenkins on Company Law Committee, reported in 1962, felt that this should not be the case. To put it plainly, it recommended the use of the term “unfairly prejudicial,” which Parliament passed somewhat late in section 75 of the Companies Act, 1980. This section is reproduced (with minor modifications) in these s. 459 of the Companies Act 1985. To justify unfair bias, it is not always necessary to prove that your stock market value has been affected. However, this is usually the case when decisions are made that have a negative impact on the business. The Company Law Review[10] decided that it would not update the unfair bias provisions for the Companies Act 2006. It had examined various proposals made by the Commission,[11] but was not enthusiastic. One of the salient features of the complaint is the amount of cases that have often been filed with a long and complicated history, as shareholders dig into the mud of the past to provide evidence of “unfair bias.” Since the 1998 Code of Civil Procedure, active case management has been a solution that has been followed.

[12] Among others, we have been able to help many clients make unfair biases at Gannon. We are able to find the best way to put pressure on the majority shareholder to create the right conditions to settle the best available result. Please give us a call or email us to discuss.. . . .