Minority shareholders also have one other right arising from IA 1986 and various rights under the CA 2006 which enable them to take action in certain circumstances (provided that the relevant shareholding thresholds are met).
Just and equitable winding up – IA 1986
The right for a disgruntled shareholder to apply for the company to be wound up on the grounds that it is just and equitable to do so arises under s.122(1)(g) IA 1986.
When a company is wound up its life is effectively brought to an end so this is rather a drastic solution for a disgruntled shareholder. In such cases the court has discretion to decide whether it is just and equitable for winding up to take place. As there is a degree of overlap between the sections, it is common for a s.122 IA 1986 and a s.994 CA 2006 petition to be made at the same time.
Other CA 2006 provisions benefiting minority shareholders
S.303 as amended by The Companies (Shareholders’ Rights) Regulations 2009
Shareholders together holding not less than 5% of the paid up voting share capital of the company can require a general meeting, by serving a request on the company.
S.314
Shareholders together holding 5% of the total voting rights or not less than 100 members holding shares in the company with the right to vote on which there has been paid up an
average sum per member of not less than £100 can require the circulation of statements regarding proposed resolutions to be considered at a general meeting.
S.338
Shareholders together holding 5% of the total voting rights or not less than 100 members holding shares in the company with the right to vote on which there has been paid up an
average sum per member of not less than £100 can force resolutions onto the agenda of an AGM for public companies only.
S.527
Shareholders together holding 5% of the total voting rights or not less than 100 members holding shares in the company with the right to vote on which there has been paid up an
average sum per member of not less than £100 can require website publication of audit concerns for quoted companies only.
s.721
Any shareholder, other than one who voted in favour of the resolution, can apply to the court for the cancellation of a special resolution approving any payment out of capital for the redemption or purchase by a private company of its shares.
In June 2007, a retired solicitor and 100 other shareholders of Tesco forced an item onto Tesco’s AGM agenda (under CA 1985) in respect of the alleged meagre wages it paid workers in the developing world to supply its supermarkets (see http://theguardian.com/business/2007/jun/29/supermarkets.tesco1). Shareholders did not pass the resolution.