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Tom B.
Tom B., Barrister & Solicitor
Category: Canada Law
Satisfied Customers: 2263
Experience:  25 years in practice
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My family has a ltd company. This ltd company has been

Customer Question

My family has a ltd company.
This ltd company has been involved with 5 other companies in the oil business for the past 40 years.
There are 5 ltd companies involved in this oil business. All are separate and we each own 20% of a company that operates the oil company. We all simply go into joint ventures together and can either go into the venture or not. We buy land together and lease land together and all own 20 % of all equipment, etc. The management in this operating company has 5 management. 3 from one family and two from the other families. Two families are not represented on the mgt team. We all share in the costs of all staff salaries, mgt salaries, everything (20% each).
Each family or company has 2 directors that sit on our so called board.
We realize that we should have a formal agreement in place and are trying to construct one.
The mgt controls the board and this board is really a rubber stamp committee. There is really one, maybe two families this mgt team does not control.
Our family is one of the families this board does not control.
For this agreement to come into effect do all parties involved (all 5 family corporations) have to agree? If four families agree to all provisions in the agreement and our family does not the other families are under the opinion that we are out of any future joint ventures moving forward because we are not part of this new agreement.
Do oppression remedy rules not matter here? Do 40 years of past practices not matter? They are holding a gun to our head saying you either get on board or you are not involved in any future joint ventures. We have never been late on payments, have always got along , etc so there is only the agreement we are in disagreement about. There are a few things we do not like in the agreement and 3, maybe 4 of the other families are ok with it.
One item we are not ok with is- if the board cannot come to an agreement on an issue or are in conflict and cannot arrive at a decision, then the MGT team takes over and can decide what to do.
Also, we want a formula in the agreement to handle things like severance and bonus pay-outs.
I do not think we are being unreasonable when we have concerns on these two issues.
Being it is a rubberstamp board we would also like to see- if two families disagreeon any item then it is defeated. They want simple majority rules because the mgt team controls simple majority via the rubberstamp members of the board.
What are our rights?
I also have stated that all families should be getting independent legal advise before signing this and one of the board members (who is a lawyer and is drawing this thing up) says he can explain anything to the families if need be. Is this not a huge conflict and very dangerous for him?
Submitted: 1 year ago.
Category: Canada Law
Expert:  Debra replied 1 year ago.

I have answered this before. Do you want a second opinion?

Customer: replied 1 year ago.
i do. Thanks. Just want to be sure.
Expert:  Debra replied 1 year ago.

I will opt out and hopefully another expert will answer.

Customer: replied 1 year ago.
Ok thanjs
Customer: replied 1 year ago.
I really do need an opinion as I have a meeting I am needing it for the first of this week coming upThanks
Customer: replied 1 year ago.
hi. Where is my opinion? Have been waiting since Friday for it. Need it today .ThanksTW

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