Companies Act 2014 – Compensation for the Oppressed

13-08-2015

Author: David O’Donohoe and Tara Creegan



Minority shareholders may now be awarded compensation by the courts for wrongs suffered at the hands of majority shareholders. This change, brought about by the Companies Act 2014, is a further powerful weapon in the armoury of a wronged shareholder of which both minority and majority shareholders should be mindful.

Section 212 of the Companies Act 2014, which came into force on 1 June 2015, deals with the protection of minority shareholders and provides that if a court is of the opinion that a company’s affairs are being conducted or the directors’ powers are being exercised in a manner oppressive to a member of the company or in disregard of its interests, it may make any order it thinks fit with a view to bringing to an end the matters complained of.

The section derives directly from section 205 of the Companies Act 1963, and both sections are broadly similar save for the addition of an express provision in the 2014 Act providing for the payment of compensation.

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