Unfair Prejudice
Unfair Prejudice is Part 30 of the Companies Act 2006.
This enables a shareholder in a company or a member of a limited liability partnership who is being treated in an unfairly prejudicial way to seek relief from a court.
Persons who have suffered from the unfairly prejudicial conduct of the affairs of a company or limited liability partnership can petition a court for relief.
Unfair Prejudice Cases
These cases involve companies with a small number of shareholders. The shareholders concerned are usually the directors and may be the only directors of the company.
Shareholders and Directors
The shareholders or directors will generally have fallen out with each other. The unfairly prejudicial conduct takes the form of an exclusion of one shareholder or director by another from the affairs of the company.
On other occasions, it arises because of the misappropriation by one shareholder or director of property or funds belonging to the company. It can also be a business opportunity that might have been enjoyed by the company.
In other cases, it takes the form of wrongful dealings with shares, improper dividends, salary or other payments or other improper conduct of the company’s affairs.
This legislation gives the court very wide powers to control the conduct of the affairs of the company and its shareholders or directors. Such proceedings regularly result in the court ordering that one shareholder or director should purchase the shares of another at a value determined by the court to be fair in the circumstances.
From the number of cases that Andrew Marsden handles, such unfair prejudice or, more particularly, unfairly prejudicial conduct of a company’s affairs, is widespread both in the Bristol area, the West Country and England and Wales generally.
