Directors falling out

Hi everybody,

I've been approached by a director of a company who has asked me to help him.

The company has two directors, each has a share. 1 director has been prosecuted for fraud (not involving the company). The directors are no longer on speaking terms and the director who approached me has asked me to terminate the other director (the 1 who was prosecuted).

I know i need to set up a transfer of shares form and termination of director. These need to be signed by the director being terminated. Is there anything else I need to do?

Also what if the director refuses to agree to this?? What happens then?

Any answers would be appreciated.

Thanks

Comments

Deadlock

JeremyNewman | | Permalink

Unless there's a shareholders' agreement or specific provision in the Articles that allow one shareholder unilaterally to appropriate the other's shares, they can't get at the shareholding. That has nothing at all to do with being a director. Any purported transfer will not be valid as the current owner won't consent, and trying to register the transfer is tantamount to theft.

With regard to the directorship, again this can't be terminated unilaterally unless there are provisions in a shareholders' agreement or the Articles that allow it. It may be possible for one director to be able to appoint an additional director, have a board meeting and remove the "fraudster" that way, but again there would have to be rights to do this in the Articles, etc.

The director who wants to do this really needs to take legal advice from a properly qualified solicitor.

Thanks

rjh1983 | | Permalink

Thanks Jeremy,

Thats a massive help.

I know how to approach this now

I've just spoke with the

rjh1983 | | Permalink

I've just spoke with the director now.

He said that the 'fraudster' director is willing to sign everything over and wants nothing to do with the business.

That's music to my ears!!

 

 

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