Shareholder Disputes

At Myerson Solicitors, our specialist shareholder dispute solicitors understand how disruptive internal disputes can be to your business. Whether it’s a disagreement between shareholders and directors or a conflict involving the terms of a shareholder agreement, our experienced legal team provides strategic, tailored support to help protect your position and resolve matters efficiently. 

We are recognised in the Legal 500 for our commercial litigation expertise and regularly act in complex and high-value shareholder disputes across the UK. We offer clear, pragmatic advice and understand the sensitivities involved when business relationships break down. 

Section 994 / Minority Shareholder Petitions 

Minority shareholders can petition the court under Section 994 of the Companies Act 2006 if they believe the company’s affairs are being conducted in a manner that is unfairly prejudicial to their interests. Examples include exclusion from management, non-payment of dividends, breaches of the articles, and excessive remuneration to majority shareholders. 

The court has a broad range of powers, the most common of which is ordering the purchase of the minority’s shares. Other remedies include regulating company conduct, preventing or authorising actions, or amending the articles. 

Derivative Actions 

When directors fail to act on wrongdoing within the company, shareholders may bring a derivative action on behalf of the company. These claims often involve breaches of duty, negligence, or fraud by directors. 

Derivative actions must be approved by the court. Key factors considered include whether the shareholder is acting in good faith and whether other remedies are available. The court may order the company to cover the claimant’s costs. 

Just and Equitable Winding Up 

Suppose a shareholder can show that it is just and equitable to wind up the company, commonly due to deadlock, mismanagement, or exclusion. In that case, they may petition under section 122(1)(g) of the Insolvency Act 1986. Courts view this as a remedy of last resort and will assess whether alternative remedies exist. 

Warranty Claims Post-Sale 

Where a buyer discovers that warranties in a share or business sale agreement have been breached, they may claim compensation. Sellers often limit liability via caps, time limits, and knowledge qualifiers. We help navigate these provisions and recover damages. 

Boardroom and Partnership Disputes 

Internal conflict between directors or partners can destabilise a business. Disputes may involve misconduct, performance issues, or partner exits. Our team advises on director removal, liability allocation, and dissolution where needed. We also resolve issues in partnerships lacking formal agreements. 

Company Restorations 

If a company has been struck off the Companies Register, it can often be restored. We assist with both administrative and court-ordered company restorations, particularly where assets remain or legal claims need to be brought. 

Breach of Fiduciary and Director Duties 

Directors are bound by fiduciary duties under the Companies Act 2006. Breaches may lead to remedies such as injunctions, director disqualification, or damages. We advise shareholders and companies on their options and assist in enforcement. 

Negotiated Solution 

Whenever possible, often parallel with legal proceedings we will strive to achieve an amicable resolution through skilful negotiation. 

Our shareholder dispute lawyers will guide you through this process to put you in the best negotiating position to explore options for compromise and facilitate constructive dialogue among the parties involved in order for you to reach a beneficial agreement. 

Potential solutions can include a buyout by the continuing shareholders in the Company, with flexibility as to how that buyout would be structured such as a purchase of shares by a third party and / or by way of company buyback of shares or demerger.    

Contentious Options 

If negotiation proves unsuccessful or impractical, we are prepared to pursue or continue court action in order to assert your rights and seek a fair resolution. 

Possible shareholder dispute actions may include: 

• An Unfair Prejudice Petition: if the company's affairs are conducted in a manner that is unfairly prejudicial to the interest of all or some of the company's members. Typically, this will result in the shareholder that has suffered the unfair prejudice being bought out by the other shareholders, however the court has wide discretion as to the orders it can make to address the unfair prejudice complained of such as the court ordering another shareholder from acting against your interests. 

• A Derivative Action: If a director breaches their fiduciary duties or engages in fraudulent conduct, minority shareholders may have the option to bring a derivative action on behalf of the company. This legal action seeks to hold the responsible parties accountable and recover damages for the company. 

• A Just and Equitable Winding-Up: In exceptional cases where the dispute cannot be resolved through other means, we can assist you with an equitable winding-up process. This involves the orderly dissolution of the company, ensuring fair distribution of assets and liabilities among shareholders. This is particularly useful where a solvent company is asset rich with property or cash and has little or no goodwill value. 

• Contractual claim for a breach of a Shareholder Agreement: If a shareholder causes a loss by failing to comply with their contractual obligations or breaches agreed restrictions such as non-compete clauses. 

• Pursuing a Shareholders Agreement procedure or remedy set out in a Shareholder Agreement and/or Articles of Association. Sometimes these corporate agreements detail procedures that can be followed to settle a dispute or deadlock such as Expert Determination , Deadlock buy-out procedures (often called Russian Roulette or Mexican Stand-offs) and Compulsory Share Transfer Notices following a material breach of a Shareholders Agreement (with Good, Bad and sometimes Intermediate Leaver’s valuation) 

Our solicitors have extensive experience in handling complex shareholder dispute High Court litigation. 

We will support you every step of the way during the claims process to ensure we achieve the best outcome for you.   

Our Dispute Resolution Solicitors are happy to discuss your situation in a no-obligation and free consultation by telephone.

We also offer different funding arrangements to suit your individual needs. Conditional fee agreements or “No win, no fee” arrangements may be available, as may insurance policies or third-party funding.

At Myerson, our litigation funding team will provide guidance in handling the financial risk that comes with litigation and directing any of those costs off your credit sheet.

We understand the costs that come with litigation, which is why we act with integrity. We will only provide funding as an option if it is in your best interests. We can advise you on whether your claim is suitable for litigation funding.

Find out more about the different litigation funding options that may be available to you.