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Shareholder rights in cross-guarantee

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I am a 33.3% holder in a private company.  Another shareholder also holds 33.3%.  He also runs a number of other companies in the same industry and they all operate under the same name but differentiated by a geographical title (e.g (Devon) Ltd, or (Lincoln) Ltd, etc)

Because of his position in the industry, he has more influence on the management of the company.  He runs it as though a subsidiary and incorporates the results in his business as a minority interest.  He does only hold 33.3% though just to emphasise

I notice in the accounts there is a cross-guarantee with his other companies.  If this isn't specifically allowed in the Shareholders Agreement can I object to this arrangement?



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By WhichTyler
06th Mar 2020 10:32

Probably best to ask the lawyer who did the shareholders agreement

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By paul.benny
06th Mar 2020 12:45

It sounds like you do have grounds to object, but it may depend on the exact wording of the shareholder agreement. Start there - and as WhichTyler said, this is a question for a lawyer.

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