Query about small company

Lucinda73

I started up a company a few months ago through Companies House with my colleague and we're both directors of it. Unfortunately on our first job (we are providing a service) he didn't turn up and has now gone AWOL. It resulted in me not being able to complete the job and I got seriously yelled at, so I would like him out of the company. He has not paid anything towards it and has no ties to it, and since I can't get hold of him there seems no other way.

Is there anyway to delete his name as a company director? Also, if I decide to not proceed with this company (since I am now going alone I might as well be self employed for a bit to see if it actually works) will having a company still open cost me anything, or should I just close it?

Equaliser123

Lucinda73 wrote: »

I started up a company a few months ago through Companies House with my colleague and we're both directors of it. Unfortunately on our first job (we are providing a service) he didn't turn up and has now gone AWOL. It resulted in me not being able to complete the job and I got seriously yelled at, so I would like him out of the company. He has not paid anything towards it and has no ties to it, and since I can't get hold of him there seems no other way.

Is there anyway to delete his name as a company director? Also, if I decide to not proceed with this company (since I am now going alone I might as well be self employed for a bit to see if it actually works) will having a company still open cost me anything, or should I just close it?

Who owns the company?

Lucinda73

I started up the company in my name originally, so I assume I do.

davec1960

If you are the majority or sole shareholder then you can remove him as a director of the company.

Did you transfer any shares to him when you made him a director?

Equaliser123

davec1960 wrote: »

If you are the majority or sole shareholder then you can remove him as a director of the company.

Did you transfer any shares to him when you made him a director?

Yes. But not quite as simple as that.

OP - any chance of a shareholders agreement being in place?

Lucinda73

We split the shares between us, no shareholder agreement in place. Ironically I did this to keep everything fair, and now I feel like I've rather been left in it!

Could I just leave the company and start a new one or will this come back and bite me on the bum?

bni

Apply to have the company struck off the register, form DS01 from Companies House.

paddyrg

Ouch an even split is awful at times like this - he owns it every inch as much as you duo even though he apparently isn't taking it seriously. Even having once extra share would have made you the majority shareholder!

Wywth

Lucinda73 wrote: »

I started up a company a few months ago through Companies House with my colleague ...
He has not paid anything towards it and has no ties to it, ...

Lucinda73 wrote: »

I started up the company in my name originally, so I assume I do.

Lucinda73 wrote: »

We split the shares between us, ...

Could I just leave the company and start a new one or will this come back and bite me on the bum?

I suggest you seek independent legal advice ... even at this late stage. Rather a shame you didn't seek this before you started.

Pennywise

I think this is a classic illustration of the hidden disadvantages of a cheap "do it yourself" style of company formation.

Time and time again, people say a company can be formed for £20 or so and then wonder why an accountant/solicitor charges a lot more.

Well, this is part of the answer. A cheap online formation company will do just that - form it cheaply with no help or advice and leave the buyer in the lurch as regards the legalities, tax, accounts, difference in roles between director and shareholder, etc etc.

However, a good accountant/solicitor will actually go into far more depth and do far more than the technical aspects of the formation itself, i.e. shareholder proportions, ensuring someone has control, importance of shareholder agreement, the actual acts of "buying" the shares rather than merely allocations, etc etc. A good accountant will handle the tax registrations, give advice re tax implications and how to pay yourself (payroll, dividends, etc), advise re book-keeping etc.

The costs of getting it wrong are often far higher than the savings made by forming it on the cheap.

Elvisia

Ah I didn't realise this, unfortunately my research (google search which brought up a lot of people who just opened it up themselves), previous guidance given from the Job Centre (ho ho ho), and asking other people who had started up their own companies to do similar things all said it's cheaper to just open it yourself rather than pay money to get someone else to do it for you.

I see from Companies House I have to wait a while before I can close it down, then I will do that myself. I think it's better to pay to have him removed, then close it as it needs his signature.

Thank you for all the advice!