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Minority. Report?

As a shareholder, how can you ensure your interests are taken on board? 

The Court of Appeal in London recently considered the protections for minority shareholders under the Companies Act 2006. It clarified the remedies available where your interests are being disregarded unfairly. 


The Company was incorporated in 2016. The Appellant is a director of the Company and holds half of the issued shares. His case is that the Company was formed as a joint venture vehicle for a cryptocurrency wallet app he came up with in 2013. The Appellant transferred his intellectual property to the Company on incorporation. Since then, he has been excluded from the management of the Company. There were allegations that the other director and shareholder (the Defendant) had misappropriated assets.  

The Defendant incorporated another company in Cyprus in 2018, applied for a US Trademark, and transferred assets from the 2016 Company. In 2019, he incorporated a subsidiary in the British Virgin Islands. The intellectual property of the app source code was transferred to the 2018 company and licenced to the 2019 company. 

Unfair prejudice

The Appellant lodged an unfair prejudice petition as a minority shareholder in the Company, alleging that the Defendant, as the majority shareholder and director, had misappropriated assets and excluded him from management.

The remedies sought included the return of the misappropriated assets, damages for the Company, and other relief as a shareholder. The Defendant claimed that the claim was abusive and should be struck out.


The Court of Appeal upheld the Appellant’s application. He has a genuine interest in redress for the Company as it impacted his own position as a shareholder. This was not an abuse of process. Rather, where there is a genuine link between personal and company interests, the remedies sought were open to the Applicant.


The case reasserts the role of unfair prejudice petitions with a clear pathway for minority shareholders to seek redress.

For more information about this article or any other aspect of corporate law and governance, contact your Napthens Solicitors in Preston, Liverpool, Blackburn and across the North West today.