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Ash
Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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I am a shareholder and Director of a company with an aggregate

Resolved Question:

I am a shareholder and Director of a company with an aggregate 17% shareholding.
I have been asking for monthly Profit and Loss information for the business (I have other businesses with no problems!) since July 2013 and keep getting brushed off with excuses.
What are my legal rights to obtain such information.
What are my legal rights regarding them ousting me? (They have no reasonable grounds as far as I can foresee).
What are my legal rights if I want to sell my shareholding to the other shareholders/directors - Is this based on how much I put into the business 20 months ago or does the business (now doing around £200k turnover a year I'm told) have a greater value than my initial investment?
Thankyou.
Submitted: 3 years ago.
Category: Law
Expert:  Ash replied 3 years ago.

Alex Watts :

Hello my name is XXXXX XXXXX I will help you with this. Please note that I am a working Solicitor and may be on and offline as I have to attend Court and meet with clients, even at weekends. As such you may not get an instant response when you reply as this is not an ‘on demand’ live service, but rest assured I will be giving your question my immediate attention upon return. There is no need to wait here, you will get an email when I reply.

Alex Watts :

Do you have any form of shareholders agreement please?

Customer:

We do have a shareholders agreement.
It is attached hereto for perusal.

Alex Watts :

They can't push you out, as a minority shareholder you would have protection from unfair treatment under the Companies Act 2006

Alex Watts :

So that you don't need to worry about.

Alex Watts :

As to request profit and loss, these would not normally be available until the AGM.

Alex Watts :

But if they are not provided at an AGM then you can seek a Court Order.

Alex Watts :

This is because it is a legal requirement.

Alex Watts :

It is not necessarily a legal requirement as a Director, but you would hope that this would be provided, although the agreement does not say that this needs to be disclosed outside the AGM

Alex Watts :

But they can't get you out and you can request disclose at the AGM

Alex Watts :

Can I clarify anything for you about this today please?

Customer:

Simon Harvey (10% A shares) was ousted by the other three shareholder/directors in January 2013 but he is still shown on the records at companies house and there has never been any re-distribution or rescindment of his a shares. He was a silent shareholder (He actually sold the original business to us 4.

As one of the other 4 Shareholder/Directors each of us has a 'functional' responsibility - which we have all fulfilled to the best of our ability (mine is Food Safety, Quality Assurance) - Can I stop providing the service until I get information from them... would this jeopardise my position and give them grounds to oust me as I seem to be getting no-where at the moment.

Customer:

Thanks

Alex Watts :

I would not do that, that could be a reason to terminate.

Alex Watts :

You could request an EGM of course but need to give 14 days notice and table a resolution for the documents

Customer:

Terminate? as in oust me?

Alex Watts :

They could try

Alex Watts :

So I would not do anything to compromise your position.

Customer:

OK. I think this tells me enough for now as I am owed expenses which I have been asking for yet they take £500 a month a service charge paid to their other company for things like waste and deliveries etc.
All very one-sided at the moment. It feels like I need to seek further legal advice and get a letter written to the other three.

Alex Watts :

I would do that yes, but certainly at least once a year you are entitled to see the P&L

Customer:

So make a formal request for the P&L/balance sheets and see where things go next.

You have been very helpful and worth the cost of the service.
Thankyou.

Alex Watts :

Thank you.

Alex Watts :

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