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Letter before Action - Shareholders' Disputes - Unfair Prejudice

Letter before Action - Shareholders' Disputes - Unfair Prejudice

Minority Shareholder

This document can be used to draft a letter before action, setting out a minority shareholder's complaints against the majority shareholder(s) for unfairly prejudicial conduct.


The minority shareholder writes to complain about the unfairly prejudicial conduct of the majority shareholder. The major shareholder provided a minority shareholder and a directorship. They were left alone as a de facto managing director.


Further complaints include when the company prospered, the minority shareholder was credited with half the profits. Moreover, they were removed by the majority shareholder as director and the profit-sharing arrangement was terminated.


Complaints against majority shareholders included:

1. Breach of shareholders' agreement and/or common understanding.

2. Exclusion from management

3. Excessive remuneration and inadequate dividends

4. Misappropriation

5. Mismanagement

6. Improper share allotment


The minority shareholder demands included:

1. Majority share to buy out/ not buy out shares

2. The company shall repay and the majority shareholder shall procure the Company to repay the shareholders' loan

3. The majority shareholder shall pay damages for breach of the shareholders' agreement


How to use this Document? 


This document should be carefully read by the individual Minority Shareholder and Majority Shareholder


The complaints against the majority shareholders, the minority shareholder demands and the expected reply time should all be clearly stated in the letter before action.


A letter before action should be sent before any legal proceedings against the majority shareholder(s) for unfairly prejudicial conduct. 


How to Tailor the Document for Your Need?

  1. Create Document: Click “Create Document” button and the document will be prepared with your account details automatically filled in.

  2. Please fill in any additional information by following the step-by-step guide on the left-hand side of the preview document and click the “Next” button.

  3. When you are done, click the “Get Document” button and you can download the document in Word or PDF format.

  4. Please review the document carefully and make any final modifications to ensure that the details are correct before sending to the addressee.

minority shareholder
breach of shareholders’ agreement
exclusion from management
inadequate dividends
improper share allotment
letter before action

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