Taylor Fordyce Articles

Minority Shareholders

August 2013

There are many instances where minority shareholders in limited companies feel that their interests in the company are not being properly looked after, and who may have been subjected to excesses of power and self dealing by those who are in control of the company, normally the majority shareholders and the directors.

In the event that a minority shareholder wishes to take action to protect his or her position there are four potential routes under which they may bring their complaint through Court proceedings namely:

  • A claim for breach of the statutory contract of membership included in the Memorandum & Articles of Association;
  • A petition under s122 of the Insolvency Act 1986 alleging that it is just and equitable that the company should be wound-up;
  • A petition under s994 of the Companies Act 2006 alleging unfairly prejudicial conduct of the companies affairs; and
  • A derivative or representative action brought on behalf of the company.

These sorts of actions can be difficult and complex ones to take forward but if you happen to be in this position, or know of someone who may need further advice here, please contact Peter Taylor, Head of our Commercial Department, for an initial free one hour consultation.