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 shareholder has to show either: (i) that the company’s
