Disagreements between the owners of a company can be among the most difficult disputes a business faces. When shareholders fall out over how the company is run, how profits are shared, or whether one of them should be bought out, the consequences reach into both the business and personal relationships behind it. The law gives shareholders several routes to protect their position, and a barrister can advise on which one fits your situation.
Through Direct Access, also known as Public Access, you can instruct a barrister directly, without going through a solicitor first. Barristers are regulated by the Bar Standards Board (BSB). This article outlines the main types of shareholder dispute and how a barrister can help you understand and pursue your options.
Where these disputes are decided
Shareholder disputes are generally dealt with in the Business and Property Courts, which handle company and commercial matters. These cases can involve detailed company law, careful examination of how the company has been managed, and questions about the value of the business. Because the issues are often technical, early and accurate advice is important.
A barrister can assess the strength of your position, explain the realistic outcomes, and help you decide whether to negotiate, pursue a formal claim, or look for an exit. That objective assessment at the start can shape the whole course of the dispute.
Unfair prejudice petitions
One of the most common routes for a shareholder who feels they are being treated unfairly is an unfair prejudice petition under section 994 of the Companies Act 2006. This allows a shareholder to ask the court for relief where the company’s affairs are being conducted in a way that unfairly harms their interests as a member.
The sorts of conduct that may give rise to such a petition include being excluded from management when there was an understanding you would be involved, the diversion of company business or profits, or decisions taken to benefit some shareholders at the expense of others. The most common remedy the court grants is an order that one party buy out the other’s shares at a fair value, although the court has wide powers to make other orders.
A barrister can advise on whether your circumstances are likely to amount to unfair prejudice, draft the petition, and represent you in the proceedings.
Derivative claims
Sometimes the wrong has been done to the company itself rather than to a shareholder personally, for example where a director has breached their duties. Normally it is for the company to take action, but if those in control will not act, a shareholder may be able to bring a derivative claim. This is a claim brought by a shareholder on behalf of the company.
Derivative claims involve a permission stage, where the court decides whether the claim should be allowed to continue. The rules here are specific, and the choice between a derivative claim and an unfair prejudice petition is not always obvious. A barrister can advise on which approach suits your case and what each is likely to involve.
Shareholders’ agreements and the company’s constitution
Many disputes turn on what the shareholders agreed at the outset. A shareholders’ agreement, alongside the company’s articles of association, can set out how decisions are made, what happens if a shareholder wants to leave, how shares are valued, and how deadlock is resolved.
Where a good agreement exists, it can provide a clear path through a dispute and may avoid court proceedings altogether. Where it is silent, ambiguous, or has been ignored, disagreements are more likely. A barrister can interpret these documents, advise on what they mean for your dispute, and identify the rights and obligations that apply. Good advice on this point can sometimes resolve matters quickly, by showing each side where they stand.
Exit and valuation
For many shareholders, the real question is not who was at fault but how to leave on fair terms. Exit and valuation issues are often at the heart of a dispute: at what price should shares be bought, on what date should the valuation be based, and should any discount or adjustment apply.
These questions can be as contentious as the underlying conduct, because they determine how much money changes hands. A barrister can advise on the legal principles that guide valuation in a dispute and help you negotiate or argue for a fair outcome, whether you are the shareholder leaving or those remaining in the business.
How a barrister supports you
Shareholder disputes reward early, clear-headed advice. A barrister can assess your prospects, explain the realistic options, draft the necessary documents, and represent you in the Business and Property Courts if the matter proceeds. Instructing directly through Direct Access can be an efficient way to get specialist input, whether you want a one-off assessment of your position or representation through to a hearing.
Whatever the source of the disagreement, understanding your legal position early puts you in a stronger place to protect your interest in the company. The information in this article is general and is not legal advice for your particular situation.
This article is general information about the law in England and Wales, not legal advice on your individual circumstances. For advice on your matter, instruct a barrister. Barristers are regulated by the Bar Standards Board (BSB).