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.
Is there a shareholders agreement? Please note it may be the morning when I can respond.
No signed shareholders agreement. Agreement discussed briefly but never agreed. Very loose agreement with only share holding agreed
When is the AGM for the previous year end?
AGM was July 2013
I know that you probably require all information but I just need to know that in general as a shareholding director am I entitled to share of profits on leaving a company. The company has money at Bank in excess of £500K so I could not be seen as taking monies that would put the companies viability in jeopardy
Question not yet answered
Were dividends declared in July 2013 please? Sorry for the overnight delay
Profit to year end which was July 2013 were a nominal sum of £2500 as the company had spent 6 or 7 months trying to get work started
Management accounts to end of Jan indicate a profit margin of £320k and since then there has been claims settled which brings the current profit for the year to date to £500K
Is it normal for a leaving shareholding director to get his/her share of profits to leaving date ?
Was there a resolution to the dividend please?
Alex I have no idea what you mean. I appreciate that if I am pursuing this further I will need to get expert advice. For now we have a very simple agreement. One director owns 40% of the company and the other three of us own 20% each. There is no legal document in place. Profits for last year were negligible and not distributed. Currently we have profits in excess of £500K. Is it normal for a leaving shareholding director to get paid a sum equal to their percentage profit on leaving ?
The answer is no.
This is because if there had been or will be a declared divided of say £1 per share for example, you would be entitled to that.
But if you give up your shareholding before the current financial year and AGM then you are NOT entitled to those accumulated profits
You need to wait until there has been a declared dividend, of course there may not be one
If there is an excess of cash in the Company, this is only determinate to the value of the share, not your entitlement to take that cash out.
If you sell M&S shares then you are not entitled to a share of their bank account.
It is only when there is a declared AGM are you entitled to have money out
Can I clarify anything for you about this today please?