Shareholder dispute solicitors in Leicester

When business owners fall out: minority shareholder rights, unfair prejudice petitions, deadlock between 50/50 owners, and how most disputes actually end.

Last updated 27 September 2026. General information about the law in England and Wales, not legal advice on your situation.

Disputes between shareholders in small companies are common and, because the owners are usually also the directors and employees, they tend to be personal as well as financial. The first question is almost always what the paperwork says.

Start with the documents

Check the articles of association, any shareholders’ agreement, directors’ service agreements, and board and shareholder minutes. A well-drafted shareholders’ agreement may already say what happens on deadlock, when someone leaves, and how shares are valued. If there isn’t one, the Companies Act 2006 and the model articles fill the gaps, often not in the way people expect.

Common situations

Deadlock between 50/50 owners who can’t agree on anything.
Exclusion of a minority shareholder from management, information or dividends.
Diversion of business or money by one director to a new company.
Exit: one owner wants out and the others won’t buy, or can’t agree a price.

Legal routes

Unfair prejudice petition (section 994 Companies Act 2006): the main remedy for minority shareholders in owner-managed companies. The court can order a buy-out at fair value.
Derivative claim: a shareholder brings a claim on the company’s behalf against directors for breach of duty, with the court’s permission.
Just and equitable winding up: a last resort where the relationship has completely broken down.
Breach of the shareholders’ agreement: a contract claim.

How most disputes end

Most end with one side buying the other out. The real arguments are over price and terms, including whether a minority discount should apply and who values the business. Mediation and early valuation evidence often bring a deal closer. While things are live, keep behaving properly as a director: take notes, don’t move money or clients, and get advice before calling meetings or removing anyone.

Common questions

Can the majority shareholders remove me as a director?

Usually, yes. Shareholders can remove a director by ordinary resolution under the Companies Act 2006, following the proper procedure. Removal as a director doesn't take away your shares, and depending on the circumstances may support an unfair prejudice claim.

What is unfair prejudice?

A shareholder can petition the court under section 994 of the Companies Act 2006 if the company's affairs are being run in a way that is unfairly prejudicial to their interests. The usual remedy is an order that the other shareholders buy their shares at a fair value.

How long do these disputes take?

Many settle within months through negotiation or mediation. A contested unfair prejudice petition that goes to trial can take a year or more and is expensive.