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Alex J.
Alex J., Litigator
Category: UK Law
Satisfied Customers: 3497
Experience:  LLB, LPC, DELF
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Customer Question

Have asked a question previously, and now moving to the next stage.
I have 51%, other shareholder holds 49%, no SPA/SHA, PAYE or Employment contracts.
Have unreconilable differences.
Invited him to special shardholders meeting to discuss his dismissal as a Director by ordinary resolution. Meeting was scheduled yesterday for 9.30am. He did not attend, no apology or communication from him whatsoever.
Can I now dismiss him by ordinary resolution being i attended the metting and hold 51%?
Further more i want his shares back, but he wont agree a buy out, just wants to wind everything up, which i dont. I can run this without him, have done for almost a year, he couldn't without me, so he's just being difficult. What can i do?
The company is a group, with 2 wholey owned subsideries, 1 is dormant the other is trading, the group itself hasnt invoiced or received a thing. Can the group transfer the shares in the trading company to me as a board decision without shareholder input? Happy to dissolve the group and dormant company, keen to keep the trading one.
Thanks in advance.
Submitted: 1 year ago.
Category: UK Law
Customer: replied 1 year ago.
Can nobody help me with this, it's been a couple of days?
Customer: replied 1 year ago.
Not sure it's relevant, but I found out subsequently to inviting him to be part of the company that he has been convicted of fraud, something which he never made me aware of until recently. Can I use this at all?
Expert:  Alex J. replied 1 year ago.

Hi, Thank you for your question and welcome. My name is ***** ***** I will assist you. Do you know what the quroum is for a shareholders meeting? Does the company use the model articles? Do you hold a debenture over any of the company assets? I won't be online all day so please do not be concerned if you do hear from me right away. Kind regards AJ

Customer: replied 1 year ago.
Hi Alex,There are no provisions in the articles with reference to a quorum for special meetings, only for general meetings and even then the genemral meeting refers to section 318. I do believe we in the model articles and no i do not have any debentures.Many thanks and regards
Gavin
Customer: replied 1 year ago.
sorry, I do believe we incorporated using the model articles.
Expert:  Alex J. replied 1 year ago.

Thank you. This is a difficult situation because in order to have quorum at general meeting under the model articles you need both members to attend. The other individual is also refusing to sell the shares to you and only wants the company wound up. Would it possible to consider allowing the winding up and selling the assets and business as a going concern to a newly formed company?

Customer: replied 1 year ago.
We dont really have many assets, a few computers scerens, a couple of fans, thats about it. He may agree to just wind up the company and we both keep the assets we have. I would have to startup a new one to keep trading and then use those in the new busy, but I guess they would just be mine. On a plus, the customers are all mine. My concern with this though was him then taking action against me a later date saying that I stole all the business away, but I guess if he agrees to winding up the company, then it doesnt matter. It's just a real headache starting up everything fresh and closing down all the other stuff.There doesnt seem to be anyway around this, I guess it will just be a case of letting the trading company fall by the wayside and not trade, then after 3 months apply for it to be dissolved? Once thats dissolved, then dissolving the group company also (which hasn't trade, but owns the shares of the trading company)
Expert:  Alex J. replied 1 year ago.

Hi, Thank you. The advantage of this headache is once the company is dissolved you are free and clear from the partner, and can pursue the clients without restriction. Just thinking outside the box have you ever conducted business by written resolution? The only problem with this is you cannot sack directors by resolution. Even though you own 51% of the company it is essentially deadlocked, because you cannot force him out and you cannot force him to sell his shares - therefore if you carried on the business in this company you would end up doing it for his benefit.

Customer: replied 1 year ago.
I dont suppose theres a way of transferring the shares in the subsidary that are owned by Inteeo Group to me, without some kind of penalty somewhere down the line?
Expert:  Alex J. replied 1 year ago.

Hi, Thank you. This would technically be possible but the shares are a company assets and would need to be transferred for proper value. Would you be able to place a fair market value on them? Kind regards AJ

Customer: replied 1 year ago.
The company hasn't made a great deal of profit in the last year, btu whatever I deemed fair, he probably wouldnt just to cause an issue and I would assume he would need to agree to it in the first place?
Customer: replied 1 year ago.
I Have been consiering sending him this:Chris,I write without prejudice after exploring various options with you and outside agencies.As the company has been trading, it appears that there are only two possible ways forward.1. You return your shares in Inteego Group in exchange for the £49 they are currently worth, which it is my understanding you do not wish to do. The businesses can then continue trading as normal. The polycom phone will need to be returned as this is on contract, however any other assets (i.e. computer screen, fan) can be kept by you.2. We liquidate the company; the liquidators will freeze all the assets (bank accounts), you will be required to return all assets to the head office (i.e. your screen, fan and telephones etc). They will then be sold and all monies accrued, creditors paid, and then the liquidators fees paid. From speaking to a liquidation agent, this could amount to several tens of thousands that we will both be liable for.Thanks
Gavin
Customer: replied 1 year ago.
A bit of a scare tacktic to get him to sell his shares back for £49, pros/cons?
Expert:  Alex J. replied 1 year ago.

Hi, Thank you. I have received this I will review it as soon as possible and revert to you. Kind regards AJ

Expert:  Alex J. replied 12 months ago.

Hi, Thank you. My apologies for the delay in responding to you. I understand what you are trying to do here, there is nothing controversial about because quite simply if he does not sell his shares, you will not prop up the company. I would explain to him as well that the company will likely have to pay the liquidators fees. The only query I have about sending this is, is the company actually insolvent?

Customer: replied 12 months ago.
I can cover all the outgoings and running costs, but not if we liquidate and close down, the company couldn't afford to pay their fees, so as per proposed letter I assume Chris and I would be liable for anything the company couldn't turn cover in relation the fees.
Expert:  Alex J. replied 12 months ago.

Hi thank you. If you appointed a liquidator you would likely have to pay his fees. If a creditor appointed a liquidator then they would have to pay the fees. Your summary is reasonable which is you are saying to your partner (1) you cannot lawfully trade a company knowing it is insolvent without incurring personal liability (2) you will not prop up the company while he is a shareholder. The ball is In his court. What you be prepared to pay anything above par value for the shares? Kind regards AJ

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