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Removing 50% shareholder (non-director)

Hi, a question: I'm a 50% shareholder of a limited company and a director. I have a dispute with the other 50% shareholder (non-director) on grounds of embezzlement of company assets. This shareholder registered, without directors consent, a company with a similar name, trading as an original business name, separate bank account, effectively dicerted company assets with sole control without sharing details and moneys.  This shareholder has resigned as a director a year ago, so liabilities expire in December. Now the company has two directors who would like to remove this person.

I have not taken this person to the court yet, because we are in the process of negotiations to return the money taken illegaly and depart amicably. The process is not going well. This might incurelawyers fees as well as going to court. This person might face criminal charges, which I woudl like not to press.

Meanwhile, I would like to remove this person from the signatory mandate of the bank. I would not like to notify the bank about the dispute because then they will freeze the account until the resolution.

I would also like to remove him as a shareholder but understand it is hard given the circumstances of holding 50% shares.

Please advise.

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21st Jan 2019 17:39

Speak to a solicitor before doing anything further. Legal fees if you finish up going to court could be considerable - worst case, up to £100k.
RM

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21st Jan 2019 17:39

Ama Polo wrote:

I would like to remove this person from the signatory mandate of the bank

Go ahead, that is usually a board of directors decision, no reason needs to be given

Ama Polo wrote:

I would also like to remove him as a shareholder but understand it is hard given the circumstances of holding 50% shares.

that should be part of the outcome of your negotiations

Ama Polo wrote:

Please advise.

Get a lawyer...

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21st Jan 2019 17:39

You can buy his shares but - provided he's paid for his shares - you can't take them from him.

Let the lawyers deal with it. This isn't an accountant's field of expertise.

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21st Jan 2019 17:43

You need to speak to a solicitor. What you have is a legal dispute, not an accounting one. ("accountingweb.co.uk")

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21st Jan 2019 21:28

Thanks all. I guess, I have no other choice to pay the solicitor.

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