Company shareholder - Cash Call request

Profcool

I suspect this is quite a niche question so not sure if anyone will be able to help, but having done a quick Google I can't get a clear answer on this. My father was a 50% owner of a business and last year that business was sold. As part of the sale agreement my father retained a 10% shareholding. At the beginning of the year my father passed away and the 10% shareholding passed to me as part of his estate. Since its sale, the business has been performing poorly and the new directors are now talking about making a cash call on the shareholders. Is anyone able to explain what my liabilities are, if any, should this request be made? As far as I can tell as a Shareholder I would need to inject cash into the business based on my % shareholding but I do not understand if I am legally obligated to do this, or whether I can refuse. Is there anyone out there who understands how business operate who can advise? Thanks 

Sandtree

You need to get proper legal advice, assuming you believe your 10% has a material value.

Have you reviewed the Shareholders Agreement? What are its clauses on cashcalls? Is it a cash for equity or a loan?

Depending on the exact terms of both the SHA and the cash call it is potentially possible that you could refuse to provide the funding (which would be proportional to your shareholding) but result in a dilution of your shareholding... so you may go from 10% to 5% as a consequence if they doubled the shares in exchange for the cash.

jonesMUFCforever

Basically - you can put in more money (that all shareholders will put in pro rata) or your 10% will be diluted. 
As a 10% shareholder you have no significant saying in how the company is run - is your holding actually worth anything?