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 businesses operate who can advise? Thanks 

wmb194

Google, 'limited liability.' You can just ignore it if you'd like. The worst thing that could happen is that your shareholding will be diluted, possibly to next to nothing, as usually a 'cash call' is by way of a rights issue. You can judge this by knowing the terms. There are 'unlimited liability' company structures e.g., certain types of partnerships but I suspect that if you were in one of these you'd know.

Thrugelmir

No liability exists for shareholders with regards to a cash call.