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A shareholder dispute can affect control of a company, the value of an investment, management decisions and the future of the business. Lewis Nedas Law advises majority and minority shareholders, directors, investors and companies on shareholder disputes in London and across England and Wales.
Speak to our shareholder dispute solicitors on +44 20 7387 2032 or complete our online contact form to discuss your position.
Our lawyers advise on disputes involving unfair prejudice, shareholder agreements, directors' duties, company deadlock, misuse of company assets, voting rights, share dilution, derivative claims, shareholder exits and applications for urgent court relief. We act for shareholders bringing claims and parties required to respond to them.
Call +44 20 7387 2032 Request a ConsultationA shareholder dispute is a disagreement concerning the ownership, control, management or affairs of a company.
Problems can arise between shareholders, between shareholders and directors, or between different groups of investors. The dispute may concern decisions taken by the board, access to information, use of company funds, the issue of new shares, dividend policy, exclusion from management or an alleged breach of an agreement.
The legal position may be governed by several sources. These can include the Companies Act 2006, the company's articles of association, a shareholders' agreement, investment agreements and other contractual arrangements.
Establishing which rights have been breached and what outcome the shareholder wants is central to deciding the next step.
Our shareholder dispute lawyers advise on matters including:
Unfair prejudice petitions under section 994 of the Companies Act 2006
Minority and majority shareholder disputes
Breaches of shareholders' agreements
50/50 shareholder and board deadlock
Exclusion of shareholders from management
Breaches of directors' duties
Derivative claims
Misuse or diversion of company assets
Unauthorised payments and transactions
Share dilution and disputed share allotments
Dividend disputes
Voting rights and company resolutions
Removal of directors
Shareholder exits and negotiated buyouts
Disputes over share valuation
Restrictive covenants and confidential information
Fraud involving directors or shareholders
Just and equitable winding-up petitions
Where the issues form part of a wider business claim, our commercial litigation solicitors can advise on the connected contractual and commercial issues.
One of the first steps in a shareholder dispute is to review the documents governing the company.
A shareholders' agreement may contain rights concerning management, reserved matters, voting, share transfers, dividend policy, director appointments, deadlock procedures and exits.
The articles of association form part of the company's constitution and can contain further rules covering shares, voting and decision-making.
These documents do not always say the same thing. The relationship between contractual rights, the articles and statutory company law may need careful analysis.
Board minutes, shareholder resolutions, Companies House records, emails, accounts and financial records can provide further evidence about how the company has been managed and how the dispute developed.
Section 994 of the Companies Act 2006 allows a member to petition the court where the company's affairs have been conducted in a way that is unfairly prejudicial to the interests of members generally or some part of its members, including the petitioner.
Unfair prejudice claims can arise in many circumstances. Examples may include exclusion from management in an appropriate case, diversion of company business, misuse of company money, excessive remuneration, improper share issues or serious departures from understandings governing how the company was to be run.
Proving disadvantage alone is not enough. The conduct must satisfy the legal test of unfair prejudice.
The court has broad powers under section 996 if a petition succeeds. A common form of relief is an order requiring shares to be purchased, but the court can make other orders concerning the company's affairs.
Many shareholder disputes eventually focus on whether one shareholder should buy another's shares and at what price.
Valuation can become one of the most contested parts of the dispute.
Issues may arise over the appropriate valuation date, the financial information used, the treatment of disputed transactions and whether any discount should apply to a minority holding.
The answer can depend on the circumstances of the company and the legal basis of the claim. It should not be assumed that a shareholder will automatically receive a particular definition of "market value".
Our solicitors can advise on the legal framework and work with valuation experts where specialist financial evidence is required.
Holding a minority stake does not mean that a shareholder has no legal protection.
A minority shareholder may have contractual rights under a shareholders' agreement, voting rights attached to their shares and statutory remedies under the Companies Act 2006.
Section 303 of the Companies Act 2006 gives qualifying members power to require the directors to call a general meeting. The required percentage is generally 10% of the relevant voting capital or voting rights, although this can reduce to 5% in certain circumstances involving a private company. If the directors fail to comply with the statutory procedure, further rights may arise for the members to call the meeting themselves.
Minority shareholders may have grounds for an unfair prejudice petition or, in an appropriate case, a derivative claim.
The precise rights available should be checked against the company's constitution, agreements, share classes and the facts of the dispute.
In owner-managed companies, the same individuals are often both directors and shareholders. A dispute can then involve two different sets of legal rights.
Directors owe statutory duties to the company. These include duties to act within their powers, promote the success of the company, exercise independent judgment, avoid conflicts of interest and declare interests in proposed transactions.
A company may remove a director by ordinary resolution under section 168 of the Companies Act 2006, subject to the statutory procedure and special notice requirements.
Removing someone as a director does not automatically remove their shares. Their rights as a shareholder may continue, which can create a further dispute over ownership, management or exit.
A derivative claim is different from an unfair prejudice petition.
Under section 260 of the Companies Act 2006, a member can bring proceedings in respect of a cause of action belonging to the company. Such claims can concern an actual or proposed act or omission involving negligence, default, breach of duty or breach of trust by a director.
The shareholder is pursuing the claim on behalf of the company rather than seeking compensation for a personal loss.
A member who starts a derivative claim must apply to the court for permission to continue it. The court applies the statutory permission procedure before the claim can proceed.
Choosing between an unfair prejudice petition, derivative claim, contractual action or another remedy requires careful analysis of who has suffered the alleged wrong and what outcome is sought.
Deadlock can arise where two shareholders hold equal voting power and cannot agree on important business decisions.
A shareholders' agreement may contain a deadlock procedure, such as negotiation, mediation, a buyout mechanism or another exit process.
Where no workable mechanism exists, the disagreement can prevent the company from making decisions and place its value at risk.
Possible solutions can include a negotiated share purchase, mediation, restructuring or court proceedings. In serious cases, a petition to wind up the company on just and equitable grounds may need to be assessed.
Section 122(1)(g) of the Insolvency Act 1986 gives the court power to wind up a company if it considers it just and equitable to do so.
This is a serious remedy. It can arise in cases involving serious deadlock or breakdown of relationships in closely held companies, particularly where the circumstances in which the company was formed and operated make winding up just and equitable.
A winding-up petition is not simply another form of shareholder exit. The impact on the company, its assets, employees and creditors can be substantial.
Other remedies may be available, including an unfair prejudice petition or negotiated buyout, so the legal and commercial consequences should be assessed before proceedings are started.
Where another remedy is available, the court may also consider whether it would be unreasonable for the shareholder to pursue winding up instead of that alternative. Our insolvency lawyers can advise where the matter involves wider insolvency considerations.
Yes. Shareholder disputes are frequently resolved through negotiation, mediation or another form of alternative dispute resolution.
A negotiated settlement may deal with a share purchase, valuation, resignation from management, repayment arrangements, restrictive covenants, confidentiality and future involvement with the company.
Mediation can be particularly useful where the parties need to resolve several connected financial and commercial issues.
If agreement cannot be reached, our dispute resolution solicitors can advise on court proceedings and interim remedies.
The Supreme Court considered whether statutory limitation periods apply to petitions under section 994 of the Companies Act 2006.
The majority held that section 994 petitions are not subject to the limitation periods in sections 8 or 9 of the Limitation Act 1980.
This does not mean delay is irrelevant. Delay or acquiescence can still affect the court's exercise of its discretion, and separate claims connected with the same dispute may be subject to their own limitation periods.
Early advice remains sensible where shareholder rights or company value are at risk.
Lewis Nedas Law's Dispute Resolution and Company/Commercial department is headed by Wilson (Will) Soares, Senior Associate Solicitor and Notary Public.
Will advises companies, entrepreneurs, high-net-worth individuals and families on contentious and commercial matters. His litigation practice includes company and contract disputes, with experience in domestic and cross-border cases.
The wider Lewis Nedas Law team can assist where a shareholder dispute intersects with fraud, insolvency, employment, property, regulatory or international issues.
A section 994 petition allows a member to seek relief where company affairs have been conducted in a way that is unfairly prejudicial to their interests.
A buyout can be negotiated or ordered as relief in an unfair prejudice case. Whether one is available and its terms depend on the facts and legal claim.
A company can remove a director by ordinary resolution under section 168 of the Companies Act 2006, subject to the statutory procedure and special notice requirements.
A derivative claim is brought by a member on behalf of the company for certain wrongs involving a director. Court permission is required for it to continue.
The Supreme Court held in 2026 that sections 8 and 9 of the Limitation Act do not apply to section 994 petitions. Delay can still affect the court's exercise of its discretion.
Shareholder disputes can move quickly from disagreement to serious financial and operational risk. Early legal advice can clarify your rights, preserve your position and identify whether negotiation, a shareholder exit or formal proceedings offer the appropriate route.
Contact Lewis Nedas Law's shareholder dispute solicitors in London on +44 20 7387 2032 or complete the firm's online contact form. We advise majority and minority shareholders, directors and companies on unfair prejudice, derivative claims, deadlock, buyouts and shareholder litigation.
Call +44 20 7387 2032 Request a ConsultationThis page provides general information about shareholder disputes in England and Wales. It does not constitute legal advice. The legal position in any dispute will depend on the company's documents, the facts and the applicable law.
