Unfair Prejudice Meaning

Unfair prejudice is conduct in a company’s affairs that unfairly harms the interests of one or more of its shareholders. It most commonly arises where one shareholder suffers prejudice, either directly or indirectly, as a result of the actions of another. Section 994 of the Companies Act 2006 specifically provides for this, stating:

“A member of a company (meaning a Shareholder) may apply to the Court by petition for an order…… on the ground;

(a) 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 

(b) that an actual or proposed act or omission of the company (including an act or omission on its behalf) is or would be so prejudicial.”

In simple terms, if you are a Shareholder and have been unfairly treated either directly or indirectly (for example by the removal of company monies or property/assets or both), you may be entitled to claim for court orders as a result of unfair prejudice.