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UKSolicitorJA, Solicitor
Category: UK Employment Law
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Experience:  solicitor
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My brother also a director of my company with 25% shareholding

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My brother also a director of my company with 25% shareholding is secretly wants to leave the company. We have PG's in place with the bank for £34k. If he resigns as a director is he still liable under the PG's for 25% or is he joint & severally liable with myself. Also can I fire him and how do I get his shareholding transferred without paying him as he put nothing into the company apart from £6700 which was the deposit for his car he wanted of which the company has paid the finance and now has refinanced the ballon payment too.

You need to read the wording of the PG as it may well be that he will continue to be liable jointly and severally with yourself notwithstanding his resignation as a director.

If he has a service contract, you need to terminate it by following the notice provisions, but if he wants out anyway, best thing would be to amicably discuss on his departure and terms.

He may transfer his shareholding to you at a peppercorn or for £1 consideration, that is up to him unless there is an agreement obliging him to transfer his shares to you if he exits as a director.

Hope this helps.
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