Companies Act 2014 section 89

Rights of holders of special classes of shares

Section 89 provides a mechanism for minority shareholders in a particular class of shares to challenge a variation of their class rights by applying to the court to have the variation cancelled.

• Members holding at least 10% of the issued shares of a class who did not consent to or vote for a variation of class rights may apply to the court to have the variation cancelled
• The application must be made within 28 days of the consent or resolution (with the possibility of a court-approved extension), and the variation does not take effect unless and until the court confirms it
• The court will disallow the variation if satisfied it would unfairly prejudice the shareholders of the affected class, having regard to all the circumstances; otherwise it will confirm it
• The company must deliver a certified copy of the court order to the Registrar within 21 days, and failure to do so is a category 4 offence