Private Limited (Family) Company

agrivator

I am a 50% shareholder (owner) of a Ltd Company along with my brother. I resigned as a director some years ago because the Company was facing insolvency, leaving my brother as the one remaining director. Our articles of association state that there must be at least two directors.


Since my resignation, my brother has been injecting his own private funds into the business, without seeking approval, even though I claim that he should have sought my permission by the proper means.


I am now intending to re-instate myself as a Director, with a view
to having the Company wound up by the least-cost route. Otherwise, I fear the net assets of the Company will be
completely eroded.


The Company owns a building from which it trades, but my brother, again without seeking my agreement, has moved the deeds and documents from the Company's Solicitor to his own private Solicitor, who he says will now act for the Company.


I am claiming that he had not sought approval and that he had acted outside his powers as the Director - what steps can I take to have the deeds returned? If they are not held by a 'neutral Solicitor, I fear that I will be powerless to act.


My first question is: The Company owns the building over which there are no charges, so I assume it also owns the deeds. As a joint and equal owner, and I know it's complicated , I gather from Company Law that I own the assets of the Company. So where do I go from here?


Sorry for such a lengthy post, but I hope that any of you with far more knowledge than me will enter into a discussion and try to offer some guidance.

agrivator

Companies House have confirmed that I can re-instate myself as a Director without my brother's permission. And obviously he would disagree because it will hopefully curtail the possibility that he could assume powers as a director to dispose of assets as he wishes.


I know the difficulties of two-man companies, but I would rather have stale-mate than have no say about the future direction of the Company.

CKhalvashi

agrivator wrote: »

Companies House have confirmed that I can re-instate myself as a Director without my brother's permission. And obviously he would disagree because it will hopefully curtail the possibility that he could assume powers as a director to dispose of assets as he wishes.

This is dangerous ground, and is not the case.

There is no way that you could add yourself as a director to any company I am a director on, even if you were a shareholder.

If this was the case, I could be a director of half the FTSE 100.

Seek legal advice before even considering signing anything along this route.

I know the difficulties of two-man companies, but I would rather have stale-mate than have no say about the future direction of the Company.

However 'stale-mate' as you described will see you in a heap of trouble.

motorguy

agrivator wrote: »

I resigned as a director some years ago because the Company was facing insolvency

You jumped ship because it was facing insolvency, but now theres assets of value you want back on board?

Pennywise

You have very little power. You're just a mere shareholder at the moment. You can force a general meeting, but you can't "impose" yourself as a director with just 50%. The other shareholder can vote down the resolution to appoint you as a director. So you are already in stalemate.

Not sure why Co House would say you can make yourself a director. Unless there's something we don't know, you can't. You can't rely on a phone comment from a faceless call centre operative! The only thing I can think of is that your resignation was actually not effective due to there being a 2 director requirement, so effectively perhaps you've remained a director throughout.

You NEED to take legal advice from a solicitor well versed in company law to properly explain your rights. You're going to get yourself in greater troubles if you start submitting director appointments etc to Co House without current Board approval!

Mistral001

See a solicitor as others have said. However telling them your plans which, as others have said, seems to be basically making a grab for part of a firm you had given up on while the other director pumped in lots of his own money might raise the eyebrow of even the most hardened commercial solicitor.

paddyrg

^^^ Don't worry, lawyers aren't paid to have moral values, they will do as instructed as long as it's within the letter of the law (and will probably help you with pompous blustery letters if it's borderline).

That said - think clearly through what's going on here. You're still a shareholder, you still get a share of the assets if wound up, or you get a share of the benefit from your brother's work and investment if he manages to grow the business. By all means express your concern, but thundering in may not actually help you if you're in a 50/50 deadlock anyway.

Annisele

agrivator wrote: »

I am a 50% shareholder (owner) of a Ltd Company along with my brother. I resigned as a director some years ago because the Company was facing insolvency, leaving my brother as the one remaining director. Our articles of association state that there must be at least two directors.

OK, but I don't see why that's a problem. If it is, surely your brother (as as the sole remaining director) can just appoint somebody else?

Since my resignation, my brother has been injecting his own private funds into the business, without seeking approval, even though I claim that he should have sought my permission by the proper means.

I don't understand how this disadvantages you. The company was facing insolvency, so your brother lent/gave/otherwise injected his own money into the company so that didn't happen.

In any event, you weren't a director, you were only a shareholder - so I don't understand what the "proper means" are that you think your brother should have used to ask your permission.

I am now intending to re-instate myself as a Director, with a view
to having the Company wound up by the least-cost route. Otherwise, I fear the net assets of the Company will be
completely eroded.

But when you resigned, you thought the company was close to insolvency - so how are things different now?

The Company owns a building from which it trades, but my brother, again without seeking my agreement, has moved the deeds and documents from the Company's Solicitor to his own private Solicitor, who he says will now act for the Company.

If you think there's some sort of conflict of interest, you can certainly alert your brother's solicitor to that - but I don't see the conflict myself. It's very normal for a single solicitor to act for both a company and its sole director, as very often the interests of those entities coincide.

I am claiming that he had not sought approval and that he had acted outside his powers as the Director - what steps can I take to have the deeds returned? If they are not held by a 'neutral Solicitor, I fear that I will be powerless to act.

So far as I know, none. You're not a director, so you have no powers here.

My first question is: The Company owns the building over which there are no charges, so I assume it also owns the deeds. As a joint and equal owner, and I know it's complicated , I gather from Company Law that I own the assets of the Company. So where do I go from here?

Sorry for such a lengthy post, but I hope that any of you with far more knowledge than me will enter into a discussion and try to offer some guidance.

I'm still stumped as to what the actual problem is, but a solicitor specialising in company law would seem a good place to start.