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What should I prepare if I want to issue an unfair prejudice petition?

Section 994 of the Companies Act 2006 allows shareholders to petition the Court on the grounds that the company’s affairs are being conducted in a manner prejudicial to the interests of the members/shareholders.

These are technically complex, typically high-value court proceedings. 

Court proceedings for unfair prejudice begin by way of a petition.

A petition for unfair prejudice must specify the grounds on which it is presented. Shareholder preparation must focus on gathering documentary evidence of prejudicial or harmful behaviour or conduct and how it has been unfair to them as the petitioner.

Such conduct must relate to the company’s affairs and not a director’s or directors’ activities. The conduct must have prejudiced the petitioner’s interests as a shareholder, and the actions must be unfair.

If any of these criteria are not satisfied, then it’s not possible to sustain an unfair prejudice petition.

The most important documents we initially need to see to establish if you have grounds for an unfair prejudice petition are:

  • A summary from you of the conduct (by the other shareholder) that has unfairly prejudiced you
  • A copy of the shareholders’ agreement (if any).

With the above documents and information in hand, we can usually provide initial informal advice and a time and cost estimate for the most appropriate next steps to protect and improve your position.

Posted by:

Alex Cook

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