I have recently taken on a new client who has been with there previous accountant for 5 years. The Company has 3 Director shareholders. Directors A&B did all the work in the Company and C purchased his shares for £50k. They had a shareholder agreement agreeing this, which is all signed and dated. When the previous accountant completed the accounts they entered the £50k as a directors loan. This carried forward for the last 5 years.
Director C now wants to sell his shares and resign as the director of the company. He is asking for his £50k back as the accounts state it was a directors loan not a share premium. Director A is happy to pay the £50k back and director B is saying no as it was a share premium.
Any thoughts on the best way to correct this situation without it getting legal.