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Divorcing husband, both 50% owners of a Ltd business

Divorcing husband, both 50% owners of a Ltd...

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Hope you can help. It's my first time posting on any site. I'm joint owner of a Limited company, I'm co secretary my husband is director, both 50% shareholders in the UK.
As we are now divorcing and I spent little time in the business as I raised our children. He is a using his position by saying most of the information I want him to disclose is 'confidential'! I want to see the full day to day trading accounts, company business credit card statements, travel information [as he has took his girlfriend on trips]. Is there anything else I should ask to see?
Am I entitled to see the above? What are my rights, I really have no business acumen and he knows this.
I have also found evidence of fraud. Please help me get round this so called 'confidential' saga. I went into the bank where the business accounts are and because I'm not a 'signed' signatorie, they won't give me copies of bank statements. Thank You

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Hallerud at Easter
By DJKL
10th Feb 2016 17:36

Are you just company secretary and 50% shareholder, you are not also a director?

If you are not a director your rights of access to company records are somewhat curtailed, if you are a director  they are equal to those of your fellow director?

This is likely (in the absence of agreed access to inspect) one for a solicitor rather than an accountant.

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By cheekychappy
10th Feb 2016 17:46

Where did he take his girlfriend on these trips?

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By TerryD
10th Feb 2016 17:47

Agree with the above

You are, of course, entitled to copies of the full (not just abbreviated) annual accounts - indeed, it is an offence not to provide them to you. But that's about it. You can petition the court to have the company wound up if you believe that the company is being run in a manner prejudicial to your interests, but, of course, that costs money.  If you have evidence of fraud, then you should see a solicitor immediately. You probably should anyway.

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David Winch
By David Winch
10th Feb 2016 18:00

Get advice from a solicitor

Because you are involved in divorce proceedings you have (in those proceedings) rights to information concerning your husband's financial affairs (separate from & additional to your rights as a shareholder in the company or the company secretary).

The only sensible thing to do is to engage a solicitor to advise you.

David

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RLI
By lionofludesch
10th Feb 2016 18:01

Solicitor

To be fair, Louisa, you're going to be needing a solicitor so just add this matter to your shopping list.

It might be worth your while to find out if anyone has a casting vote in the case of a deadlock in voting.

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By johngroganjga
11th Feb 2016 08:42

Just to add to what David has said:

Until you engage a solicitor to initiate divorce and related financial proceedings your rights to information are limited to the full (not abbreviated) annual accounts of the company. Until then you are not entitled any of the other information you describe, no matter how curious you are to see it, and it is no surprise at all that your efforts so far have failed.

Once you initiate financial remedy proceedings (as financial proceedings in divorce are called) everything changes.  Your husband will then be under a legal obligation to make full disclosure of all his financial affairs, including everything you mention in relation to the company but also extending, for example, to copies of his personal bank and credit card statements. If he does not provide that information voluntarily the court will order him to do so. If he does not comply with a court order he may be found to be in contempt of court and may be sent to jail. Just google "Scot Young divorce" if you want to see a real life example of that happening.     

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By Louisa Suntry
25th Feb 2016 10:29

Thank you for your comments.  I have engaged in a solicitor and forensic accountant.  It is a booming business, plans to build and extend have been granted also.  However, he says this is now a no go as poor him doesn't have any money...  I was married for over 17years and I know very well that he has money, the business takes cash too, which I know I can't trace.

I have the accounts, but surely anyone can come up with certain figures?  If he had nothing to hide, why can't I see the day to day business accounts and business credit cards?  After saying these are confidential, He has used the credit card to pay for family holidays etc.  Also, I have caught him out twice with fraud and with this in mind, I'm certainly hoping I will get a court order for the accounts in question as he is inconsistent in all his legal documents so far.  He is a man that can't be trusted.

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By AndersonAccountancy
11th Feb 2016 09:33

I would just like to add....

Make a list of exactly what you have done in the business. Although you are Comp Sec and 50% shareholder, unless you have been active in the company you may find that you are not entitled to any part of it excepting your shareholding (which could potentially be valueless anyway). Get the full accounts (which as a shareholder you are entitled to see) and look for the equity on the Balance Sheet - this is the amount distributable to shareholders. While you retain your shareholding, you will always be entitled to 50% of this - unless of course you sell your shares back to the company or your husband.

But as mentioned above - go get a divorce lawyer.

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By Glenn Martin
11th Feb 2016 09:44

Personal Tax

I would imagine you have been included as a shareholder purely for tax reasons where you are allocated the minimum wage and half the dividends from the company. Do you have a copy of your personal tax return which will give you the impression of what half of the income from the business looks like.

If you have not got a copy the accountant that looks after the company should have them and would have to give you it, obviously you should have signed them when they were prepared.but i appreciate that from your position you have may have been signing things you were asked to without fully understanding what they were.

The abbrieviated accounts from companies house will give you an idea as to the company net worth which may not be much if all monies are drawn by the Directors as you do not state if its a large company or not.

This will give some back ground for when you see your lawyer which you need to do ASAP as if the company is just a service company your husband may well just close it down and start again without you as a shareholder.

 

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By WallyGandy
11th Feb 2016 17:10

True words from Glennzy

Agree fully with all the above comments- go see a lawyer NOW as us accountants are not sufficiently familiar with such legal matters.

But beware throwing good money after bad- as Glennzy says, if this company is a service company (ie not buying and selling) it can cease trading and re-appear almost overnight.

Whilst the assets of OldCo would then crystallise allowing you to see the equity as described so well by AndersonAccounting, that's as far as you'll get.

By far and away your best bet is to take a far wider view of the overall financial position of your husband and this Company is only a part thereof.

Good luck and beware pyrrhic actions- lawyers can be expensive.

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By johngroganjga
25th Feb 2016 10:39

Your solicitor will explain the process for obtaining the documents you need to see, which will be much easier once the legal process is underway, as then it will be a matter for court orders, which he will ignore at his peril, rather than polite requests from you or your solicitor, which he is free to ignore with impunity if he wishes to do so.

Your solicitor will also explain the scope of the documents you can expect to be able to obtain.

Good luck, and thanks for reporting back.  

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