2 directors, one wants out

2 directors, one wants out

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Hi there

If there are 2 directors in a company, one wants out, can he force a liquidation if he owns 50% of the share. If the other director refuses to get out, does the director have any responsibility to the company to work for it short term. Can he just start another company and take his clients with him?

Thanks in advance!

Jay

Replies (5)

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By arcon5
29th Nov 2013 08:50

Taking clients with him would most likely be a breach of his duties as director to that company. Especially if any creditors are owed money.
Can't he just buy his shares?

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Replying to david5541:
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By jasonowsky
29th Nov 2013 09:37

BUY OUT

The other one is demanding an extortionate amount for his shares, so there's a big difference in what one is willing to pay the other!

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By johngroganjga
29th Nov 2013 09:08

A 50% shareholder can't wind up a company without the agreement of the other shareholder as a winding up requires a special resolution (75% majority).

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By johngroganjga
29th Nov 2013 09:49

They need legal advice to resolve their dispute. It may be a good candidate for mediation. What do the Articles say about pre-emption rights and the basis for arriving at the price to be paid?

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Replying to leicsred:
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By jasonowsky
29th Nov 2013 12:56

articles

Many thanks for people's replies.

 

I have had a look at the articles, it's standard wording and just seems to mention alloting new shares, not what to do with the existing ones. It does not mention anything about the basis for arriving at the price to be paid. Essentially, one director wants out and is prepared to just let the company be liquidated, but obviously knows that he had directors' duties (although presumably he could resign?). The articles are very brief. i have had a quick look at the Companies Act, but as per usual, it seems impossible to get straight forward advice or orders from!

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