Companies Act . Trust me , they won’t mess with Thehotticket.21 Sep 2022 18:33
A member of a company may apply to the court... for an order... on the ground that the company's affairs are being or have been conducted in a manner that is unfairly prejudicial to the interests of its members generally or of some part of its members...'
You may have trouble understanding the very legalistic manner of this provision – many lawyers do – but basically it seeks to protect minority shareholders from wrongdoing, so it’s key that you understand it.
The provision protects those with a shareholding in a company of 50% or less, in situations where the controlling stakeholders seek to act in a way which is 'unfairly prejudicial' to their interests.
In general terms, section 994 allows minority shareholders a ‘right to complain’ to the court if majority shareholders run the company in a way that damages their position or the value of their shareholding, something that is often done deliberately by misapplying or misusing Company assets.