Unfair Prejudice and Corporate Governance: Key Developments (2024–2026)

This guide replaces an earlier "2024 trends and statistics" article. Rather than estimates, it sets out the verifiable legal developments from 2024 to 2026 that affect shareholder disputes and corporate governance in England and Wales. There is no official published count of unfair prejudice petitions, so we do not give one.

Unfair prejudice: the key decisions

No limitation period for s994 petitions

The most important development is THG plc v Zedra Trust Company (Jersey) Ltd [2026] UKSC 6, decided on 25 February 2026. A minority shareholder in THG plc sought to add complaints to its petition that were more than six years old. The Court of Appeal ([2024] EWCA Civ 158) had held that a six-year limitation period applied where the petition sought a money payment.

The Supreme Court, by a majority (Lord Burrows dissenting), allowed the appeal. It held that a petition under section 994 of the Companies Act 2006 is not an "action upon a specialty" under section 8 of the Limitation Act 1980, and that section 9 (sums recoverable by statute) does not apply even where monetary relief is requested. Any payment order comes from the court's discretion, not from a statutory right to a sum.

Two practical points follow:

• Delay still matters. The court can take account of unjustified delay that harms the respondents or others when deciding whether to grant a remedy and which one.
• The Supreme Court noted that the Law Commission had once recommended a three-year limit, but said whether to introduce one is a policy question for Parliament.

Prejudice need not be financial

In Saxon Woods Investments Ltd v Costa [2025] EWCA Civ 708 (9 June 2025), a shareholders' agreement required the parties to work in good faith towards an exit by the end of 2019. The chairman misled the board and the company failed to engage with a potential buyer. The Court of Appeal held:

• unfair prejudice does not require proof of financial loss: losing the opportunity to pursue an exit was itself prejudice;
• the duty in section 172 to act in good faith includes honesty, judged objectively, not just the director's own belief; and
• an unconditional buy-out at a non-discounted value, fixed as at 31 December 2019, was the appropriate remedy.

Economic Crime and Corporate Transparency Act 2023

The Economic Crime and Corporate Transparency Act 2023 (ECCTA) is being brought into force in stages. The main changes so far are below.

Registered office, email and lawful purpose (4 March 2024)

• Every company must have an "appropriate" registered office address, where documents will come to the attention of someone acting for the company. A PO box alone is not acceptable.
• Companies must give Companies House a registered email address. It is not shown on the public register.
• Companies must confirm on incorporation, and each year in the confirmation statement, that they are being formed and will operate for lawful purposes.

Identity verification (from 18 November 2025)

Since 18 November 2025 new directors and people with significant control (PSCs) must verify their identity with Companies House. Existing directors and PSCs have a 12-month transition period: directors confirm their verification when the company files its next confirmation statement, and PSCs have separate 14-day windows. Companies House has said a confirmation statement will be rejected if the directors have not verified. The transition period runs to November 2026, after which Companies House has said it will start compliance action. See the Companies House guidance.

For shareholder disputes, this matters because a disputed or unverified appointment, or a failure to file, can now carry direct regulatory consequences as well as private-law ones.

Failure to prevent fraud (from 1 September 2025)

A new corporate offence of failure to prevent fraud came into force on 1 September 2025. It applies to large organisations, meaning those meeting two of these three tests: more than 250 employees, more than £36 million turnover, or more than £18 million total assets. An organisation can be liable if an employee, agent or other associated person commits a specified fraud intending to benefit it. The only defence is having reasonable fraud prevention procedures. The penalty is an unlimited fine. The Home Office has published guidance on the offence.

Company size thresholds (from 6 April 2025)

For financial years beginning on or after 6 April 2025, the size thresholds used for accounts and reporting increased. A company falls into a category if it meets two of the three tests:

Category	Turnover	Balance sheet total	Employees
Micro-entity	£1 million or less	£500,000 or less	10 or fewer
Small	£15 million or less	£7.5 million or less	50 or fewer
Medium	£54 million or less	£27 million or less	250 or fewer

Some companies will move to a smaller category, with lighter reporting and audit requirements. Shareholders who rely on published accounts for information should be aware that less detail may be filed. The medium thresholds are in section 465 of the Companies Act 2006.

UK Corporate Governance Code 2024

The Financial Reporting Council published a revised UK Corporate Governance Code in January 2024. It applies, on a "comply or explain" basis, to companies with a premium (now commercial companies) listing, for financial years beginning on or after 1 January 2025. The main change is Provision 29, which applies to financial years beginning on or after 1 January 2026. Boards must make a declaration on the effectiveness of the company's material internal controls (financial, operational, compliance and reporting) at the balance sheet date. The FRC expects first reporting against Provision 29 in 2027. The Code does not apply to most private companies, but many follow parts of it as good practice.

What this means in practice

• Minority shareholders are not shut out by the passage of time alone, but should still act promptly.
• Exit and good-faith clauses in shareholders' agreements are enforceable, and breach can lead to a buy-out even without proven financial loss.
• Companies should check that directors and PSCs are verified and that registered office and email details meet the new rules.
• Large organisations should review their fraud prevention procedures.

Key points

• THG v Zedra [2026] UKSC 6: no statutory limitation period for s994 petitions; delay goes to the court's discretion.
• Saxon Woods v Costa [2025] EWCA Civ 708: unfair prejudice need not be financial.
• ECCTA: new registered office and email rules (March 2024), identity verification (November 2025) and failure to prevent fraud (September 2025).
• Higher company size thresholds apply from 6 April 2025.
• Provision 29 of the 2024 Code applies to financial years from 1 January 2026.