A minority member in a company does not have much power to influence its management or any majority members and, therefore, sometimes their interests are disregarded. Should they need to protect their position, a minority member may do so in a number of ways, eg they may pursue a derivative claim, bring an unfair prejudice claim by petition or seek that the company be wound up. A minority member may also bring a claim against a director in their personal capacity, rather than as a director, where there are grounds to do so.

This fundamentals note considers how a minority member may seek to protect their interest in a company by pursuing a derivative claim. For further information, see Practice Notes: Derivative claim—what it is and when to use it, Statutory derivative claim—the procedure and Derivative claims—key and illustrative decisions.

For information on the other procedures and remedies available to a minority member, see Practice Notes: Unfair prejudice claims—fundamentals and Just and equitable winding up—fundamentals.