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Stuart J
Stuart J, Solicitor
Category: Law
Satisfied Customers: 22621
Experience:  PGD Law. 20 years legal profession, 6 as partner in High Street Practice
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I am the majority shareholder of an established IT business.

Customer Question

I am the majority shareholder of an established IT business.

I own 60%, my business partner owns 40%

He has been appointed as managing director.

I gave him to shares years ago and let him run the business for me.

We have a different directions we want to take the business and I want my company back.

Can I force him to sell his shares back to me and what is the best way to dismiss him?

KR,
BL
Submitted: 3 years ago.
Category: Law
Expert:  Stuart J replied 3 years ago.

Hello, I am Law Denning and I am a practising solicitor in a High Street practice. I have been an expert on this website in UK law since 2008. During that time, as you appreciate, I have answered thousands of questions from satisfied users, I might not always respond in minutes. Please bear with me in that case.

It is with pleasure to try to assist you with this today. Please bear with me while I gather some further information from you in order for me to be able to advise you fully.

How many shares do you both have?
Customer: replied 3 years ago.


Hi


 


Thank you for the quick response..


 


There are 100 shares and I own 60 and my business partner owns 40.


 


Kind regards,


Brett

Expert:  Stuart J replied 3 years ago.






You cannot force him to sell shares to you any more than you he
can force you to sell yours to him. If that was possible, there would be no
point in having the shares in the first place.



There are two issues with regard to removing him as a director,
which does not really help your scenario, the first one is that you would need
to remove him as an employee and would then face a tribunal claim the second
one is that you would need to remove him as a director which needs a
shareholders resolution.



You would actually still be stuck with him as a shareholder.



I'm afraid that at this stage in time, you are faced with making
him an offer that he cannot refuse. This is a private limited company and
therefore it really comes down to how much it is worth to you to get control
and how much it is worth to him to walk away.



Although you can have the shares valued, he can simply say that
he does not want to buy them.



You could sell your shares to someone else but that would depend
on whether the memorandum and articles allows you to do that without offering
them to him first.



I'm sorry, I wish there was a magic solution for you but there
isn't.



Can I answer any specific points?