Winding up, Special Resolution

Winding up, Special Resolution

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I've been approached via another client by a shareholder of a property company. There are 3 shareholders and they sold both rental properties in the y/e 31/3/08. The Company is to be wound up but there is a difference of opinion about distributing the shareholder funds. The Company's accounting firm has recommended a series of dividends which would span 3 years to avoid higher rate tax, this suits 1 shareholder, also a client of the same accounting firm but not the other 2. The accountants have said that a special resolution would be required to force a C16 route with a 75% majority which of course won't be achieved. This doesn't seem right to me but can't locate any information on this. Any suggestions?
Mark Peters

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By jamesashburton
19th Dec 2008 14:40

Good point Denis
Never underestimate the power of gentle blackmail!

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By flurrymc
17th Dec 2008 16:05

negotiate
Remember the other two have the ability to sanction or block the declaration of dividends. So they may be able to negotiate a compromise with the minority shareholder.

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By markabacus
17th Dec 2008 14:07

Options
Purchase of own shares I believe would fail as it doesn't fulfill either the requirement as a benefit of the trade as the company has no trading assets left and is therefore dormant and it is not to enable payment of IHT.

Entrepreneurs relief I believe won't work either as the disposal predates not post dates the company's cessation.

Special resol'n - 75%+ majority with only 3 shareholders makes life difficult to say the least, as in this case, 1 effectively stops the other 2, the minority rules.

Thanks for the feedback.

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By User deleted
17th Dec 2008 12:16

Correct
75% voting majority requried for a special resolution, which is held at a General Meeting.

I presume you have explored whether Entrepeneurs Relief could be available?

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By User deleted
17th Dec 2008 12:03

Depending on...
...the circumstances. Application for capital treatment on company purchase of own shares might be worth looking at.

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David Winch
By David Winch
17th Dec 2008 09:04

Special resolution

A Special Resolution requires a 75% vote in favour, see
http://www.companieshouse.gov.uk/about/gbhtml/gba7.shtml

David

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