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Jo C.
Jo C., Barrister
Category: Law
Satisfied Customers: 31300
Experience:  Over 5 years in practice
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We are a family business, last year the son of a director was

Customer Question

We are a family business, last year the son of a director was granted a court of protection for his father to become his deputy. The deputy has a financial adviser who is meddling in the family business, coursing harassment to the remaining directors, demanding on behalf of the deputy to have meetings, to provide information about family assets, the financial adviser composes letters for the deputy to sign then sends to the company, the last letter received consisted of a request for a general meeting with the deputy splitting his father's shares into two proxies, allowing the financial adviser, and the deputies wife to attend the meeting. We would like this harassment to stop so that we can get on with running the business.
Submitted: 3 years ago.
Category: Law
Expert:  Alex J. replied 3 years ago.
Hi,

Thank you for your question and welcome.

My name is AJ and I will assist you.

Can you let me know the following:
(i) Do you have a shareholders agreement?
(ii) How many directors are there?
(iii) What percentage of the shares does the fathers (deputy's family) own?

Kind regards

AJ
Customer: replied 3 years ago.

We do not have a shareholders agreement there are three directors, the father was a director until declared unsound in mind, by his family, then automatically removed but still holds 40% shares which the son is a representative of.

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

Thank you.

In the long term what do you want to achieve? Do you want them out of the company? Or do you just want to reach some amicable ground for going forward?

Kind regards

AJ
Customer: replied 3 years ago.

We want to stop the harassment, to be left to run the business, we want to rid the financial adviser who is pulling the strings, and we think is just bombarding us with letters, to run up bills for the deputy.

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

Thank you.

Just so I can fill in the background, can you give me an idea as to what the letters say other than calling for General Meetings and asking for financial statements.

Are they asking you to explain your actions?

Kind regards

AJ
Customer: replied 3 years ago.

we have not been asked to explain our actions,

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

Thank you.

You do not have to respond to the financial adviser unless directed to do so by the shareholder who instructed him.

Unfortunately though the family are entitled to demand that General Meetings are called as 40% shareholder (See s.303 of the Companies Act 2006) and to see the financial records in the deputy's capacity as a director.

What you need maybe is to consider signing a shareholders agreement with them to govern the grounds on which they are allowed to meddle and interfere in the running of the company.

If you look at S.172 of the Companies Act 2006 - directors are required to act in the best interests of the company - is there any that the deputy is doing (with specific examples) that contravenes this?

Kind regards

AJ
Customer: replied 3 years ago.

I regret having to close due to lack of time

Expert:  Nicola-mod replied 3 years ago.
Hello,

It seems the professional has left this conversation. This happens occasionally, and it's usually because the professional thinks that someone else might be a better match for your question. I've been working hard to find a new professional to assist you with your question, but sometimes finding the right professional can take a little longer than expected.

I wonder whether you're OK with continuing to wait for an answer. If you are, please let me know and I will continue my search. If not, feel free to let me know and I will cancel this question for you.

Thank you!
Nicola