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The flexible friend

20 January 2017 / Daniel Lightman KC
Issue: 7730 / Categories: Features , Company , Commercial
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Daniel Lightman QC highlights how versatile ss 994 & 996 of the Companies Act 2006 can be for minority shareholders presenting an unfair prejudice petition

  • The courts take a flexible approach to the requirements for an unfair prejudice petition to be well-founded under s 994 of the Companies Act 2006.
  • The courts show similar flexibility in exercising the wide powers given to them as to what relief they can grant under s 996, and against whom.
  • While a share purchase order is the most common relief granted, the courts are increasingly open to bespoke solutions tailored to the circumstances of the particular case.
  • These factors make a s 994 petition—or the threat of presenting one—an increasingly powerful and flexible weapon for a minority shareholder.

Recent case law has emphasised just how versatile a weapon the power to present an unfair prejudice petition under s 994 of the Companies Act 2006 (CA 2006) can be for a minority shareholder.

The requirements of s 994

By s 994(1) of CA 2006, the petitioning

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