Director vs shareholder

Wife passed away before divorce

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Husband and wife owned company- 50/50. Separated but not divorced but were in the process of getting divorced, and wife passed away. No will.

Daughter is director but not shareholder. Agreed to pay father an amount each month for next 4 years as payment for company. Fall out over the estate has meant money has stopped.

So father owns 50% and other I suppose is being sorted by solictors dealing with estate.

Legally, can the father over rule the decision to stop payment? I suppose he could decide to make himself director and then do it?

I'm unsure due to the shares that were the wife's.

Replies (15)

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stonks
By WinterDragon
04th Mar 2024 17:29

Before everyone piles in pointing out that this is a legal question...

If I were you I wouldn't lift a finger unless you are certain that you have been given a lawful instruction i.e. don't start removing directors on Companies House unless you have the written resignation of the Daughter or you're certain that the company's articles allow for what you are being asked to do.

It's not your battle to fight and the husband will undoubtedly need paid-for legal advice to stand a chance with the mess that's been made.

An unfortunate reminder that we should all organise our affairs - I really must get round to sorting my will...
Hopefully, an amicable resolution will be reached before the solicitors end up eating the entire estate.

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By DKB-Sheffield
04th Mar 2024 18:21

Agree that this is a legal matter however...

"Daughter is director but not shareholder. Agreed to pay father an amount each month for next 4 years as payment for company."

And...

"Legally, can the father over rule the decision to stop payment?"

Seems odd?

Unless the position is that the company is buying back it's own shares (leaving only the 50% owned by the estate)... the 2 points don't appear to refer to the same issue.

The daughter buying father's shares doesn't appear to be a company matter/ transaction.

Still IANAL, and I'd not be looking at advising - other than providing numbers to the party with whom I hold a suitable engagement, and on matters for which I'm engaged. This has all the hallmarks of being a nightmare... estates, family rifts, and - by the sounds of it - undocumented agreements! Aarrgghh!

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RLI
By lionofludesch
04th Mar 2024 21:21

I dunno.

I'm not a lawyer.

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By Tax Dragon
05th Mar 2024 05:56

How were the payments being taxed?

As for your question... you've marched straight past the big sign saying "warning, accountants keep out". It's there partly for your protection and partly to protect your client from you.

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Lisa Thomas
By Lisa Thomas - Insolvency Practitioner
05th Mar 2024 11:48

"Legally, can the father over rule the decision to stop payment?"

I'm a bit confused. If the daughter is buying the father's shares that doesn't have anything to do with the company.

So daughter is still director of the company (regardless) and father still owns shares with the deceased estate (albeit the daughter may argue she has made some payments towards purchasing some of her father's shares?)

Was daughter using the company's money to buy the shares?

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By djn
05th Mar 2024 11:57

So the agreement was that he would receive a wage for the next 3 years in final settlement.

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Replying to djn:
Lisa Thomas
By Lisa Thomas - Insolvency Practitioner
05th Mar 2024 12:04

Was that going to go down as a debit on the daughter's directors loan account?

Is the father an employee?

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By djn
05th Mar 2024 12:11

Father as employee

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Replying to djn:
Lisa Thomas
By Lisa Thomas - Insolvency Practitioner
05th Mar 2024 12:23

So if the father is not actually going to provide any employee services (which I suspect is another issue altogether), this will mean the daughter is using company money to buy a personal asset.

So should that not debit her DLA?

Or is this just an odd promise to provide him with a job for three years and he will actually work as an employee?

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By Tax Dragon
05th Mar 2024 12:22

Blood from stone.

Three years is a long notice period.

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By Paul Crowley
05th Mar 2024 18:38

I think Dad is the winner. He appoints the legal guy for the estate based on what is disclosed.
Companies are owned and run by the shareholders. Time for Dad to appoint 4 new directors of his choosing.

Daughter maybe thought Mum was leaving her the shares? Silly girl thought Dad needed to be punished?

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Replying to Paul Crowley:
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By Tax Dragon
05th Mar 2024 21:13

Do you know what the settlement says?

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Replying to Tax Dragon:
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By Paul Crowley
06th Mar 2024 12:27

Your guess is probably better than mine.

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Replying to Tax Dragon:
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By djn
06th Mar 2024 13:26

Tax Dragon wrote:

Do you know what the settlement says?


It's all verbal
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Replying to djn:
RLI
By lionofludesch
06th Mar 2024 13:48

djn wrote:

Tax Dragon wrote:

Do you know what the settlement says?

It's all verbal

So not worth the paper it's not printed on?

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