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Shareholder Disputes

If you are a shareholder and believe that the actions of the directors and/or majority shareholders are causing damage to the company, it is vital to seek early legal advice.

Our Dispute Resolution Team in Stafford, Newcastle-under-Lyme or Alsager can give you help and advice as soon as a shareholder dispute arises.  Often this early intervention can help to resolve the dispute quickly and in the most cost-effective way.

Winding up the company

If you are in the minority and cannot reach an agreement with the majority and/or the board then you can consider various legal steps to protect your interest.

A minority shareholder can apply to the Court for the company to be wound up if it is “just and equitable” to do so.  Examples of when a Court might make such and Order include:

  • the directors awarding themselves excessive pay but refusing to pay dividends to shareholders
  • the majority shareholders consistently ignoring the rights of the minority
  • there is deadlock within the company
  • a minority shareholder being wrongly excluded from management

Unfair prejudice

Perhaps the most powerful tool for a minority shareholder is to issue a petition under section 994 Companies Act 2006.  This applies when a minority shareholder believes that the affairs of the company are being conducted in a way which is “unfairly prejudicial” to its members. 

Other situations where unfair prejudice has been found include:

  • misappropriation of company assets
  • mismanagement of internal affairs
  • not paying reasonable dividends
  • a failure to consult or to provide information
  • improper allotments of shares and rights issues

If a petition is successful, the Court has a very wide discretion to make such order as it thinks fit.

Why the Nowell Meller Disputes Team is the right choice for you

We believe that it is important to try to resolve disputes without Court proceedings where possible, as this is often the quickest and most cost-effective way to get the result you need. 

However, if a settlement cannot be reached our experience in litigation and strong advocacy skills will put you in the best place to succeed in your dispute.

If you need advice in a Shareholder Dispute please do not hesitate to speak to one of our friendly team members on 01785 252377 for Stafford, 01782 987551 for Newcastle-under-Lyme,  or 01270 446260 for Alsager.