50 - 50 Ltd Company - Directorship terminated with no prior notice or advice

WoodyBristol · 9 December 2019 at 7:50AM

My Ltd company is structured -

My self and co-director
1 x Ordinary share each
50 - 50 split - no persons with significant control

Key responcibilities -

Myself - front of house, sales, account management etc
Business partner - IT, website, email etc

My business partner has done the dirty on me and terminated my directorship without any prior knowledge of warning. He then hacked my company email account, removing all emails from all my devices.

It was only by chance after looking on Companies House websites few weeks later I found that my directorship had been terminated. In the interim we had been conducting business as normal.

I would really appreciate some advice.

Thanks

soolin · 9 December 2019 at 11:33AM

WoodyBristol wrote: »

My Ltd company is structured -

My self and co-director
1 x Ordinary share each
50 - 50 split - no persons with significant control

Key responcibilities -

Myself - front of house, sales, account management etc
Business partner - IT, website, email etc

My business partner has done the dirty on me and terminated my directorship without any prior knowledge of warning. He then hacked my company email account, removing all emails from all my devices.

It was only by chance after looking on Companies House websites few weeks later I found that my directorship had been terminated. In the interim we had been conducting business as normal.

I would really appreciate some advice.

Thanks

You need a lawyer that specialises in this sort of thing- and I suggest you get one urgently. Meanwhile keep a paper trail, or screen shots of everything as it currently is and anything you have from the original set up, you will also need your original contractual legal agreement that set the business up.

00ec25 · 9 December 2019 at 2:33PM

as above, see a lawyer

the company's articles of association will list how directors can be removed if they do not voluntarily resign. Since I assume you have not resigned yourself, then there may have been a breach of your company rules and legal action can follow from that

if both shares rank pari passu then he cannot unilaterally act to your detriment since, as you say, there is no one with a controlling interest

WoodyBristol · 9 December 2019 at 4:08PM

Thanks for reaching out 👍🏻

Aquamania · 9 December 2019 at 8:27PM

WoodyBristol wrote: »

My Ltd company is structured -

My self and co-director
1 x Ordinary share each
50 - 50 split - no persons with significant control

Key responcibilities -

Myself - front of house, sales, account management etc
Business partner - IT, website, email etc

My business partner has done the dirty on me and terminated my directorship without any prior knowledge of warning. He then hacked my company email account, removing all emails from all my devices.

It was only by chance after looking on Companies House websites few weeks later I found that my directorship had been terminated. In the interim we had been conducting business as normal.

I would really appreciate some advice.

Thanks

Anyone with more than 25% of share capital is defined as a person with significant control

https://www.gov.uk/government/news/people-with-significant-control-companies-house-register-goes-live

But apart from that, yes I agree with others you need specialist legal advice. One of the main issues you have is that you have a 50/50 split of shareholders, no nothing can be agreed unless both agree.

lisyloo · 9 December 2019 at 11:46PM

My husband was strongly advised to give me 49 and not 50.
We are 49/51.

martindow · 10 December 2019 at 9:54AM

lisyloo wrote: »

My husband was strongly advised to give me 49 and not 50.
We are 49/51.

That is fine if you are willing to accept that.

If two people are considering setting up their company why would either volunteer to be the 49%? I can see the logic of avoiding stalemates but both would want to be 51. I'm sure this is why companies are set up 50:50 even if people are advising them not to do so. People never start with any wish to consider their business falling apart at some point in the future.

Pennywise · 10 December 2019 at 10:18AM

martindow wrote: »

I'm sure this is why companies are set up 50:50 even if people are advising them not to do so. People never start with any wish to consider their business falling apart at some point in the future.

Have to agree. I deal regularly with new businesses and always have a very long/detailed conversation with them about the dangers of a 50:50, the need for a proper contract, the need to discuss exit routes, etc. I don't know why I waste my breath (well I do, it's so they can't sue me!). Time and time again, they nod and agree, and then go ahead with a 50:50 without a contract "because they've been friends since childhood" or some other guff. Then time and time again, after a few months, I get the phone call that they've fallen out and it's all turned into an expensive disaster.

You can lead a horse to water..................

50 - 50 Ltd Company - Directorship terminated with no prior notice or advice

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