I am an equal shareholder in a small company. Earlier this year my co-director /co-director resigned giving no notice, leaving the company at a point when our financial status was not good and the financial records (I later discovered) which he had managed were in a total mess.
I have worked hard to sort the financial records out and get the company back on an even keel and the company is still solvent (we can cover all debts as they become due till at least Christmas), but our sole client may give notice on their contract shortly and a big contract I have just pitched for may not come off. Which would pretty much be the end of the company.
I have just been told that if I get to the point where I feel the responsible thing to do is to wind the company up, my co-shareholder could refuse to do so; forcing me to either 'wrongfully trade' or take him to court.
Is this true? If it is, the law is mad!
If I do end up in court, do you know if I could re-claim all or some of the fees?
Also, am I right in thinking that I would be at the bottom of the list in terms of money owed to me by the company in my role as employee?
And my co-shareholder has a small director's loan due for payment Summer 2009 - would he be forced to pay this back?
Any help much appreciated...
A worried company director!
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Replies (2)
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Why are those the only options?
How can your business partner be 'forcing me to either 'wrongfully trade' or take him to court'?
Why do you have to trade if you don't take him to court? I think we are missing some important information here. Certainly continuing to trade while insolvent could land you in a heap of trouble.
New Company ?
If as you say your Co-Director has resigned but obviously still a shareholder, and the Company is at this present time still solvent. Maybe its the time to consider forming a new company with just you as the shareholder and pitching for new business through this company.
If your existing company looses its existing only client, then why not just cease to trade collect all the assets and pay of the liabilities leaving just a dormant company.
You continue on your own in the new company.