The Chancery Division delivered judgment on a petitioner’s application for interim relief in an unfair prejudice petition in Jonathan Frank Bown v Clive Shipley and Durley Farm Limited [2026] EWHC 918 (Ch). In considering the application, the court assessed whether the petitioner has standing to bring the petition. The court dismissed the application as the petitioner had not demonstrated standing to the required standard for the relief sought, but allowed the petition to proceed to trial, as it could not resolve the issue of standing at this hearing. Sophie Lalor-Harbord, Tom Otter and Punam Shah examine the decision.

Relevant facts on the standing issue

Mr Bown’s petition under section 994 of the Companies Act 2006 (“s994”) concerned Durley Farm Limited (“Durley”). Durley was incorporated on 25 February 2014 as a joint venture between Mr Bown and Mr Shipley to acquire agricultural land in Somerset for future development.

The original shareholding structure was 50% held by Original Construction Company Limited, Mr Shipley’s wholly owned company, and 50% held by Embrize Natural Resources Limited (“ENR”), Mr Bown’s wholly owned company.

Mr Bown was never originally registered as a member of Durley in his personal capacity. However, he claimed standing on two alternative bases:

• That he was the “beneficial owner” of ENR’s 50% shareholding; and/or
• That ENR’s shares had been transferred to him personally pursuant to an executed stock transfer form, even though the transfer was not registered.

It was common ground that:

• Mr Bown’s name was not on Durley’s register of members; and
• Any alleged transfer to Mr Bown had not been registered in the company’s register.

There was a factual dispute as to whether the completed stock transfer form was ever delivered to the company.

The law on standing

Members and unfair prejudice petitions

Under s994, a petition can be presented by either:

• A “member” (sub-section 1); or
• Non-members to whom “shares in the company” have been transferred or transmitted by operation of law (sub-section 2).

A member is dealt with by section 112 of the Companies Act 2006, and a person can become a member in two ways:

• By being “subscribers of a company’s memorandum” (sub-section 1, i.e. the original members); and
• By agreeing to become a member of the company and the person’s name being entered in the company’s register of members (sub-section 2, i.e. the subsequent members).

Membership does not require ownership of shares as companies can exist without shares, but being on the company register is necessary to bring a petition.

Transfers not yet registered

Under s770 of the Companies Act 2006, a company may not register a transfer of shares unless a proper instrument of transfer has been delivered to it. An agreement to transfer is insufficient. The transfer must be executed and delivered to the company (in accordance with Re a Company No 007828 of 1985 (1986) 2 BCC 98,951) in order to find a right to seek registration and support standing under s994(2).

Application of law to facts

Beneficial ownership

Mr Bown argued that as he wholly owned ENR, he was the beneficial owner of Durley shares. However, beneficial ownership of shares does not confer standing under s994. The judge cited Otto and Ors v Inner Mongolia Happy Lamb Catering Management Company Ltd and Ors [2025] EWHC 2291 (Ch), in which Stewarts successfully acted for the respondents to defend an application brought by the petitioners to amend their petition. Standing requires either being a member or being transferred shares, and ‘transfer’ in the latter case means the transfer of legal title, typically by execution and delivery of a properly completed stock transfer form. The judge concluded that beneficial ownership alone is insufficient.

As a result, Mr Bown was not a member under s994(1). Even if Mr Bown controls ENR, that does not give him any proprietary or beneficial ownership in either ENR’s shares in Durley or Durley’s assets. A company is a separate legal personality, and a shareholder has no legal or beneficial interest in the company’s assets, even if they own all of the shares or they control the company entirely (Macaura v Northern Assurance Co Ltd [1925] AC 619, HL).

Alleged share transfer – the only possible route to standing

On the pleaded case, the only viable basis for standing for Mr Bown was under s994(2) on the basis that ENR completed and delivered a stock transfer form to Durley transferring ENR’s shares to Mr Bown. During the hearing, Mr Bown was able to produce an executed stock transfer form, but no documentary evidence showing that it had been delivered to the company.

The judge noted that Mr Bown’s pleaded case contains allegations that Mr Shipley removed online authentication codes that would have enabled him to change entries in the online register at Companies House, but pointed out that this is irrelevant. The relevant register for standing is the statutory register of shareholders kept by the company, which can only be updated once a properly executed stock transfer form has been delivered to the company, and confirms the owners of the shares in law (i.e. the shareholders with legal title).

As part of his interim relief application, Mr Bown was seeking orders that would involve a change in the management of the company from Mr Shipley to Mr Bown. Given the intrusive nature of this interim relief sought, Mr Bown needed to show that there was a serious issue to be tried and a high degree of assurance that standing would ultimately be established at trial.

The judge gave five examples of how Mr Bown had a fundamental misunderstanding of company law matters, for example, his failure to understand the role of Companies House filings and how a shareholder of one company does not have a beneficial interest in shares which that company owns in other companies. The court accepted that there was a serious issue to be tried, but did not have a high degree of assurance that standing would be established. The application was therefore dismissed. However, the judge gave directions to trial, as the issue of standing is a factual dispute that could not be resolved at this hearing.

Key lessons

Standing is a threshold battlefield in unfair prejudice petitions. Beneficial ownership is irrelevant, and to rely on standing as a transferee, the stock transfer form must be executed and delivered to the company. Companies House filings do not determine membership, effect share transfers, or cure failures to comply with the company’s internal registers.

An earlier judgment in the Otto case (Otto and Ors v Inner Mongolia Happy Lamb Catering Management Company Ltd and Ors [2024] EWHC 497 (Ch)) addressed these same issues. Stewarts also successfully acted for the respondents in their application to amend their defence and defend an application to rectify the register. In the latter most of the petitioners relied on s994(2) as the basis for standing.

In Otto, a shareholder register existed, but no stock transfer forms had been completed to give the petitioners in question standing to bring the petition. Instead, they were seeking to establish standing by applying to rectify the register in order to perfect legal title to shares. However, the ability to infer intended shareholdings and retrospectively rectify the register does not apply where a shareholder register exists, and a petitioner’s title depends on uncompleted or undocumented share transfers.

Standing is a gateway requirement for s994 petitions, with the onus being on the petitioner to prove that they have standing. In the context of share transfers, the petitioner must evidence a transfer of legal title delivered to the company, or facts capable of completing registration of such title.