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Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3496
Experience:  Solicitors 2 years plus PQE
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If I am a 40% shareholder in a limited company set up by a

Customer Question

If I am a 40% shareholder in a limited company set up by a friend can i have the shares taken from me by the other share holders ??
Submitted: 2 years ago.
Category: Law
Expert:  Alex J. replied 2 years ago.
Hi,

Thank you for your question and welcome.

My name is AJ and I will assist you.

Once you have your shares the only way they can be taken off you is:
1. You sell them by signing a stock transfer form;
2. The shares are redeemable by the company;
3. You have entered into an agreement that allows them to be forcibly bought off you e.g an option or shareholders agreement.

Were you issued the shares correctly and do you have a share certificate?

I look forward to hearing from you.

Kind regards

AJ
Customer: replied 2 years ago.

initially it was done under the basis that i wouldnt have to protect myself from issues like this , they were signed to me and appear on the likes of companies house under my name etc ?

Expert:  Alex J. replied 2 years ago.
Hi,

Thank you.

Do you have a share certificate?

Kind regards

AJ
Customer: replied 2 years ago.

No , Who would issue that or would i need to apply for it personally ?

Expert:  Alex J. replied 2 years ago.
Hi,

Thank you.

Once the shares have been issued the company should send you a share certificate. It is not essential but it is normally absolute proof of your ownership.

If you have proof that the shares were issued to you, then you cannot be forced to give them up other than how I have described above.

Did you pay for the shares?

Kind regards

AJ
Customer: replied 2 years ago.

no i didnt pay for them as it is a company myself and a colleague have started from scratch , is there anyway i can get a certificate now after the fact ?

Expert:  Alex J. replied 2 years ago.
Hi,

Thank you.

The certificate needs to be signed by a director of the company. So technically you could issue it yourself if you were a director.

How exactly have the shares been taken from you? Have you been given notice?

Kind regards

AJ
Customer: replied 2 years ago.

Hi


 


They haven't been taken from me as yet to my knowledge but things have become very sour between me and my business partner and its impossible for us now to work together , neither me nor my business partner are listed as director as we were advised not to be by our account but unfortunately the only director is my former closest friends fiance!?


 


The problem I have is that initially we were given help by a joint friend who in return for a set up loan got 20% of the shares and me and my partner 40/40, some time ago i locked the security code i had for access to the company account which wasnt a issue at the time but now i am being deigned access to the account and pushed out of the business and i need to make sure the shares cannot be automatically taken from me as i have spent 4 years building this company !

Expert:  Alex J. replied 2 years ago.
Hi,

Thank you.

No then in all likelihood they cannot be taken from you unless you agree to sign them over.

It would be wise however for the company to issue share certificates.

For the shares to be legally transferred to a third party you would need a CON40G stock transfer form and you would have to sign it.

Do you want to discuss anything else?

Kind regards

AJ
Customer: replied 2 years ago.

i am named as a 40% share holder on companies house as I've just checked , so they above would apply then?

Expert:  Alex J. replied 2 years ago.
Hi,

Thank you.

Yes to transfer the shares of which you are a legal owner you would need a CON40G stock transfer form.

Currently the only evidence you are a shareholder is at Companies House and this information is only updated once a year in the annual return. Ideally what you need is a share certificate.

Can you also get the statutory accounts - presumably your shares are ordinary shares of £1 each - check in the accounts whether they have been listed as paid or unpaid?

Kind regards

AJ

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