Minority Shareholder Protection

The principal remedy is set out in section 994 of the Companies Act 2006, which allows 'a member of a company' to 'apply to the court by petition for an order under this Part on the ground' either 'that the company's affairs are being or have been conducted in a manner that is unfairly prejudicial to the interests of members generally or of some part of its members (including at least himself)', or that an actual or proposed act or omission of the company is or would be so prejudicial. The right extends to a person who is not a member but to whom shares have been transferred or transmitted by operation of law.

An unfair prejudice petition under section 994 sits alongside other protections for minority shareholders, including the statutory derivative claim and a petition for the company to be wound up on the just and equitable ground. Section 994(1A) makes clear that removing a company's auditor 'on grounds of divergence of opinions on accounting treatments or audit procedures' or 'on any other improper grounds' is itself treated as unfairly prejudicial conduct for the purposes of a petition.