Some of the hardest disputes we handle are not between strangers but between partners: people who started a company together, trusted one another, and can no longer share a room. When the majority uses its control to squeeze out the minority — cutting them out of management, stopping their dividends, diluting their shareholding — the law has an answer, and it is section 346 of the Companies Act 2016.

What section 346 protects against

Section 346 gives a member the right to petition the court where the affairs of the company are being conducted, or the powers of the directors are being exercised, in a manner oppressive to one or more members, or in disregard of their interests; or where an act of the company is, or is threatened to be, unfairly discriminatory or otherwise prejudicial.

“Oppression” is not a term of precise definition, and that is deliberate. The courts have understood it broadly, as conduct that is burdensome, harsh and wrongful, or a visible departure from the standards of fair dealing that a shareholder is entitled to expect. Typical examples include exclusion from management contrary to an understanding on which the company was formed, diversion of the company’s business or profits, improper allotments of shares that dilute the minority, and the persistent non-payment of dividends while the controllers extract value in other ways.

What the court can do

The remedies under s.346 are wide, and this is the section’s real strength. The court may make “such order as it thinks fit”, which in practice most often means an order that the majority (or the company) buy out the minority’s shares at a fair value — allowing the aggrieved shareholder to exit with the value of what they built. The court can also regulate the conduct of the company’s affairs in future, cancel or vary a transaction, require the company to do or refrain from an act, or in a proper case order a winding-up.

What a court will want to see

An oppression petition is decided on evidence, and the evidence is largely documentary. In our experience three things matter most:

  • The record. The board minutes, the register of members, the financial statements, the correspondence. Oppression is shown through the company’s own documents, so securing and reading them early is essential — before they are tidied.
  • The understanding. Many oppression cases turn on an understanding, sometimes unwritten, about how the company would be run and how the founders would share in it. Contemporaneous evidence of that understanding is gold.
  • The valuation. Because the usual remedy is a buy-out, most petitions ultimately settle on a number. Getting to a defensible valuation, worked from the accounts, is often what resolves the dispute.

A word on timing and alternatives

There is no fixed limitation period for a s.346 petition, but delay can weaken it — a court may ask why, if the conduct was truly oppressive, the petitioner waited. Where the relationship has broken down completely and no buy-out can be agreed, a just-and-equitable winding-up under s.465(1)(h) may be the alternative, though it is a remedy of last resort because it breaks up the business entirely. Which route fits depends on what you actually want: to exit with value, to stay and reform the company, or to end it.

This article is general information as at March 2026 and is not legal advice. Shareholder disputes are highly fact-specific; take advice on your own position before acting.