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Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3696
Experience:  Solicitors 2 years plus PQE
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I was a company director and 33% shareholder, but resigned

Resolved Question:

I was a company director and 33% shareholder, but resigned my directorship over a year ago as I didn't agree with how the business was being run. I have not being involved with the business in any role since. It is now going into liquidation and I am being asked to sign paper for liquidators etc. I don't want to be involvers in any way, the company has at present one director who is a shareholder and a further shareholder, all with 33.3% ea.
Submitted: 3 years ago.
Category: Law
Expert:  Jo C. replied 3 years ago.
Hi.

Thank you for your question. My name is XXXXX XXXXX I will try to help with this.

How can I help with this please?
Customer: replied 3 years ago.

I would like confirmation of my obligations to the business as a shareholder and wether I am required to be involved in the liquidation process.

Expert:  Alex J. replied 3 years ago.
Hi,

Thank you for your question and welcome.

My name is XXXXX XXXXX I am a company law expert. My colleague has asked me to assist you with this.

Have you been sent a questionnaire from the liquidators? Is that what they are asking you to sign.

How long ago did you resign?

Kind regards

AJ
Customer: replied 3 years ago.

I'm being asked to sign and personally guarantee the liquidators instruction.


 


I resigned as a director 12-11-12


 


 

Expert:  Alex J. replied 3 years ago.
Hi,

Thank you.

Your obligation as a director is to co operate with the liquidators and this normally means simply filling out a questionnaire and providing information. You should not be personally guaranteeing anything. You should also make it clear that your involvement in the business ceased over a year ago and accordingly you cannot comment on any of the circumstances that lead to the insolvency. I would also point out in any of the questionnaire answer you should caveat them to "the best of your knowledge" or where you do not know say you do not know because you were not involved in the business.

It maybe that you are being asked this in your capacity as a shareholder. Was this a liquidation voted for by the shareholders?

Kind regards

AJ
Customer: replied 3 years ago.

I believe that the liquidators are looking for a personal guarantee of their fees, £5000 in total.


 


The existing management of the business has transferred the "goodwill" into another business in return for employment. They had attempted to wind up the company and have settled 95% of debts. Unfortunately a number of customers have taken the opportunity to not pay their debts as they no longer feel obligated. Some creditors have taken their debts through the courts and it is this pressure that has led to the liquidation.


 


I've been told that the company (before bailiffs fees etc) owed £22500 and was owed £18500, with £4000 of the owed element disputed.


 


So the liquidation process has been instigated by the one remaining director, who is also a shareholder, and another of the shareholders. Three shareholders in total with 33% ea

Expert:  Alex J. replied 3 years ago.
Hi,

Thank you.

There is absolutely no reason for you to personally guarantee the liquidator's fee unless you are going to receive a return from the liquidation.

By agreeing to fees you are signing away the limitation of your liability as a shareholder.

The only up side is the liquidator will be friendly and protect you from personal claims as a director. Such claims would be unlikely if you have not been involved in the company for over a year, have not taken its assets and the company was solvent when you left.

In any event even if you did have such a claim against you (which would come from the liquidator anyway) you could just hire your own solicitor to defend you.

I look forward to hearing from you.

Kind regards

AJ
Alex J., Solicitor
Category: Law
Satisfied Customers: 3696
Experience: Solicitors 2 years plus PQE
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