Section 994 of Companies Act 2006 seeks to protect minority shareholders, should they feel a grievance that other (usually majority) shareholders have acted unlawfully and subsequently prejudiced the position of other members. Understanding the Companies Act is essential to grasp the various issues that may arise with shareholders disputes, as well as the protection offered by the Act. However, as is often the case, the terminology used can be difficult to understand even for those in the industry, let alone a layman or those specialising in other areas completely.

Shareholders disputes can occur for a variety of reasons, including the companies overall management, strategy or direction; policies on salaries and dividends; clash of personalities; unfair treatment of members; breaches of shareholders agreements; failure to meet legal or accounting requirements or changes in business interests. Shareholders disputes often do not stem from malicious intentions, but as with any form of conflict or dispute resolution, the situation can easily change and can take unexpected twists and turns with emotions running high.

Minority shareholders disputes can arise from being excluded from areas of the business, or being treated unfairly by majority members. Majority shareholders can face issues such as minority members not pulling weight in the business or preventing progressive decisions being made.

SM Law has a offices in Liverpool and are experts in shareholders disputes, assessment of risks and working towards dispute resolution with members. Shareholders Disputes are one of a large number of commercial litigation services we offer including commercial fraud, defamation, injunctions and arbitration.

For more information about shareholders disputes or any of our other commercial-litigation related services, contact us using any of the methods below…