How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Vincent2013 Your Own Question

Vincent2013, JustAnswer Expert
Category: Law
Satisfied Customers: 213
Experience:  Qualified solicitor and barrister (non-practising) with 7+ years experience
Type Your Law Question Here...
Vincent2013 is online now

I a 50% shareholder in a business, the other director has

Customer Question

I' a 50% shareholder in a business, the other director has the other 50%. It's a classic situation where I'm 25 years younger and he's not pulling his weight. He won't sell.....has money already.....just likes to recieve his dividend.
I basically want out and we only have two staff that would come with me.
I can't get access to the Articles of Association.....but I'm 99% sure they are standard.
Can I resign my directorship and move on? I'm not bothered about the shares....the business will fold without me and the two staff being there.
Submitted: 3 years ago.
Category: Law
Expert:  Vincent2013 replied 3 years ago.

Hi, thanks very much for your question. My name's XXXXX XXXXX I'm going to assist you with it.


The first thing you need to do is to check the provisions of any shareholders agreement or service contract to see if you have (in your capacity as a director / shareholder) any obligations NOT to compete with the business. These are somethimes referred to as "restrictive covenants" and are fairly common.


As well as being common, they are also commonly unenforceable! This is because they must NOT go beyond what the company is legitimately entitled to protect itself against balanced against the need for an individual to move on, earn his livelihood and (in doing so) use the skills he previously deployed for the former company.


In the absence of any restrictive covenants, the next matter to consider are the fiduciary duties that you owe to the company as a director. In a recent case in 2012, the Court of Appeal discussed the fiduciary duties of employees and directors. In essence, a director has (amongst many other duties) a duty of "loyalty" to the company to which he is appointed. Despite this, he is entitled to take the decision to set up a competing business and discuss this with family and friends, without needing to advise the company of this. The problem arises if he starts making preparatory steps. He must resign once he has irrevocably decided to engage in a competing business and taken preparatory steps to do so. This means poaching customers and members of the workforce whilst still a director would be a breach of the director's statutory duty and could, conceivably, result in a claim being made by the company for damages.


In your situation (as you quite rightly point out) you will need to resign. The key is to ensure that, in the absence of any specific contractual restrictive covenant, you are very careful with regard to how you take matters forward in respect of employing any former colleagues.


Can I clarify anything for you? I should also point out, that I would be very happy to assist you in getting hold of the articles, which can be done online (if that's useful).

Expert:  Vincent2013 replied 3 years ago.

Hi Andre. I hope my answer yesterday was helpful. If so, I would be very grateful if you could take a quick moment to rate it. Otherwise, do let me know if I can clarify anything for you.


Best wishes,



What Customers are Saying:

  • Thank you so much for your help. Your answers were really useful and came back so quickly. Great! Maggie
< Previous | Next >
  • Thank you so much for your help. Your answers were really useful and came back so quickly. Great! Maggie
  • A quick response, a succinct and helpful answer in simple English. I believe I can now confront the counter party with confidence -- worth the 30 bucks! Rick
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP
  • I couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin
  • Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. Esther

Meet The Experts:

  • Jo C.

    Jo C.


    Satisfied Customers:

    Over 5 years in practice
< Last | Next >
  • Jo C.'s Avatar

    Jo C.


    Satisfied Customers:

    Over 5 years in practice
  • Ben Jones's Avatar

    Ben Jones

    UK Lawyer

    Satisfied Customers:

    Qualified Solicitor - Please start your question with 'For Ben Jones'
  • Buachaill's Avatar



    Satisfied Customers:

    Barrister 17 years experience
  • Max Lowry's Avatar

    Max Lowry


    Satisfied Customers:

    LLB, 10 years post qualification experience
  • UK_Lawyer's Avatar



    Satisfied Customers:

    I am a qualified solicitor and an expert in UK law.
  • Kasare's Avatar



    Satisfied Customers:

    Solicitor, 10 yrs plus experience in civil litigation, employment and family law
  • Joshua's Avatar



    Satisfied Customers:

    LL.B (Hons), Higher Prof. Dip. Law & Practice