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Buachaill
Buachaill, Barrister
Category: Law
Satisfied Customers: 10772
Experience:  Barrister 17 years experience
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hi my partners have frozen me and my wife out of the company

Customer Question

hi my partners have frozen me and my wife out of the company i built.
we were four equal partners each with 25% shares in a private limited company,
one of the partners died 18th of june 2012
he was the sole director of the company
his son who is a solicitor became director of the company
he did not hold a share holders meeting
he has allocated the shares of the deceased directors shares to his himself and three of his brothers and the other share holder
two of us share holders holding 25% each totaling 50% shares were not offered the opportunity to purchase any of the shares,
we have not received any rent from the property we own 50% either since last november

hope this gives some sort of idea of whats going on
Submitted: 4 years ago.
Category: Law
Expert:  Buachaill replied 4 years ago.
1. At the outset, you need to call an Emergency General Meeting of the company to find out what is going on and to elect new directors. As yourself and the other shareholder hold 50% of the shares of the company, you only need one more vote to elect whatever directors you choose and to decide how the company should be run. Be aware that the appointment by the son of the deceased of himself as a director is probably invalid as it did not have a majority of the shareholders agreeing to this course of action. A person cannot unilaterally appoint themselves director of a company.
2. However, the downside to what you have set out, is that yourself and the other 25% shareholder had no right to purchase the shares of the deceased shareholder, unless the company's Articles of Association & Memorandum of Agreement gave you pre-emption rights. So you cannot complain about the fact you were not offered these shares to purchase before their transfer to the children of the deceased.
3. You should prepare an agenda for the General Meeting of the company and call upon the directors to account for the money being received in rent from the property. You should also consider being appointed a director yourself in order that you may run the company properly.
4. Finally, be aware that you can take legal action for being frozen out of the company in his fashion under the minority oppression provisions of the Companies Act. However, before you take such action you will have to make your best attempt to deal with matters through internal company procedures such as by holding a General Meeting.