Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Unfair prejudice definition

What does Unfair prejudice mean? Unfair prejudice describes a shareholder claim that the company’s affairs have been conducted in a way that unfairly harms the claimant’s interests as a member. In England & Wales, Scotland and Northern Ireland it is the statutory minority shareholder remedy under the Companies Act 2006, ss 994–999 (a “s.994 petition”). The Act states the test; case law defines what is “unfair” and “prejudicial”, including legitimate expectations in quasi‑partnership companies. In Ireland, similar relief is available under the Companies Act 2014, s 212 (the oppression remedy), which targets conduct that is oppressive or in disregard of a member’s...

Articles of association: contractual effect, breaches, ratification and remedies under the Companies Act 2006; minority shareholder actions and specific remedies (lien, calls, forfeiture)

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Practice notes

This Practice Note examines the distinctive contractual nature of the articles of association as between the company and its members, with a primary focus on section 33(1) of the Companies Act 2006 (CA 2006). It assesses various forms of breach of the articles, considering when a majority of members may approve or ratify a breach in defined circumstances, or otherwise take appropriate steps against the board or an individual director, where relevant. It also considers actions brought by a minority shareholder, in particular personal actions for alleged infringements of ‘membership rights’ deriving from the constitutional contract. There is also brief reference to derivative actions, unfair prejudice claims and winding-up.

What is the company’s constitution

Unless the context otherwise requires, a company’s constitution is defined under CA 2006 to include:

the company’s articles of association, and
any resolutions and agreements affecting a company’s constitution

Before 1 October 2009, the memorandum of association formed an essential element of a company’s constitution, but CA 2006 has markedly reduced its practical constitutional role. Nevertheless, any provisions that appeared in the memorandum of a company in existence before 1 October 2009 are now to be treated as provisions of the company’s articles...

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Web page updated on 21/05/2026

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