Companies Act 2006, section 994

Petition by company member

Part 30 Protection of members against unfair prejudice

(1)A member of a company may apply to the court by petition for an order under this Part on the ground—

(a)that the company's affairs are being or have been conducted in a manner that is unfairly prejudicial to the interests of members generally or of some part of its members (including at least himself), or

(b)that an actual or proposed act or omission of the company (including an act or omission on its behalf) is or would be so prejudicial.

[F1294 (1A)For the purposes of subsection (1)(a), a removal of the company's auditor from office—

(a)on grounds of divergence of opinions on accounting treatments or audit procedures, or

(b)on any other improper grounds,

shall be treated as being unfairly prejudicial to the interests of some part of the company's members.F1294]

(2)The provisions of this Part apply to a person who is not a member of a company but to whom shares in the company have been transferred or transmitted by operation of law as they apply to a member of a company.

(3) In this section, and so far as applicable for the purposes of this section in the other provisions of this Part, “company” means—

(a)a company within the meaning of this Act, or

F1295(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Read section 994 in the full Act → Definitions (4) Cases (346)

Definitions used in section 994

member

(2) In sub-paragraph (1) “member” has the same meaning as it has by virtue of section 7(1) of that Act .

Defined in Sch.2 Pt.1 · see it in the full Act
company

(4) In this section, and so far as applicable for the purposes of this section in the other provisions of this Part, “company” means any body corporate that is liable to be wound up under the Insolvency Act 1986 (c. 45) or the Insolvency (Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19)).

Defined in s.995(4) · see it in the full Act

“company” means a company formed and registered under this Act, that is—

(a)

a company so formed and registered after the commencement of this Part, or

(b)

a company that immediately before the commencement of this Part—

(i)

was formed and registered under the Companies Act 1985 (c. 6) or the Companies (Northern Ireland) Order 1986 (S.I. 1986/1032 (N.I. 6)), or

(ii)

was an existing company for the purposes of that Act or that Order,

(which is to be treated on commencement as if formed and registered under this Act).

Defined in s.1(1) · see it in the full Act

(4) In this section and that Schedule “company” includes any body corporate.

Defined in s.1159(4) · see it in the full Act
the court

(1) Except as otherwise provided, in the Companies Acts “the court” means—

(a)in England and Wales, the High Court or the county court;

(b)in Scotland, the Court of Session or the sheriff court;

(c)in Northern Ireland, the High Court.

Defined in s.1156(1) · see it in the full Act

(2) The provisions of the Companies Acts conferring jurisdiction on “the court” as defined above have effect subject to any enactment or rule of law relating to the allocation of jurisdiction or distribution of business between courts in any part of the United Kingdom.

Defined in s.1156(2) · see it in the full Act
share

(1) In the Companies Acts “share”, in relation to a company, means share in the company's share capital.

Defined in s.540(1) · see it in the full Act

Cases considering section 994 (346)

THG Plc v Zedra Trust Company (Jersey) Ltd

[2026] UKSC 6 · 25 February 2026Interprets

Creates a petitioning jurisdiction responding to a state of affairs that is unfairly prejudicial. It does not create or enforce a substantive obligation and is not subject to sections 8 or 9 of the Limitation Act 1980. Delay may nevertheless affect relief (see paras [116]-[117]; [155]-[158]; [170]-[172]). The subsection permits a member to petition where company affairs, or an actual or proposed company act or omission, are unfairly prejudicial. It creates access to a discretionary remedy rather than a substantive statutory obligation (see paras [10]; [116]).

FamilyMart China Holding Co Ltd v Ting Chuan (Cayman Islands) Holding Corporation (Cayman Islands)

[2023] UKPC 33 · 20 September 2023

Confirms, by comparison with Cayman law, that an inter partes share-purchase remedy for unfairly prejudicial conduct may be granted by an arbitral tribunal where the tribunal has jurisdiction and third-party interests are not engaged. (see paras [15]; [33]; [76])

Guorui Song & Anor v Kes Smith & Ors

[2026] EWCA Civ 719 · 9 June 2026

The judgment applies section 994 by requiring unfair prejudice to the Petitioners in their capacity as members. Financial prejudice depends on whether the alleged wrongdoing would have given value to their shares, subject to broader forms of prejudice. (see paras [2]; [58]-[61]; [116]-[120])

326 more judgments, and what each says about section 994, are in the case-law panel in the full Act.

Amendments and notes

4 notes from legislation.gov.uk

Amendments

  1. F1294S. 994(1A) inserted (6.4.2008) by The Statutory Auditors and Third Country Auditors Regulations 2007 (S.I. 2007/3494), reg. 42(1) (with reg. 42(2))
  2. F1295S. 994(3)(b) omitted (26.5.2015) by virtue of Deregulation Act 2015 (c. 20), s. 115(3)(r), Sch. 23 para. 28(7)

Modifications

  1. C1364Ss. 994-996 applied (with modifications) (1.10.2009) by The Limited Liability Partnerships (Application of Companies Act 2006) Regulations 2009 (S.I. 2009/1804), regs. 2, 48 (as amended (1.4.2013) by S.I. 2013/472, Sch. 2 para. 174)

Commencement

  1. I333S. 994 wholly in force at 1.10.2007; s. 994 not in force at Royal Assent see s. 1300; s. 994 in force at 1.10.2007 by S.I. 2007/2194, art. 2(1)(j) (with saving in art. 12 and subject to transitional adaptations specified in Sch. 1 and with transitional provisions and savings in Sch. 3) this amendment is subject to savings and/or transitional provisions, see the commentary.