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Ash
Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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I resigned a company Director and still have a third of the

Resolved Question:

I resigned a company Director and still have a third of the shares. I agreed to sell the shares to the other two Directors (I have emails confirming the amount and the accountant for the company has said that he is still waiting for confirmation from the other two directors). The problem I have got is that both directors are ignoring my calls and emails to try and finalise the sale. I am getting suspicious that they have now changed their mind and what we agreed on will be renegaded. I am unsure as to where I stand legally as to what we agreed and also now that I have resigned, they can reduce the dividends we were getting and increase there salary; making the shares worthless effectively.
Any advice would be welcome.
Submitted: 3 years ago.
Category: Law
Expert:  Ash replied 3 years ago.
Alex Watts :

Hello my name is ***** ***** I will help you with this.

Alex Watts :

Has any contract been signed please?

Customer:

No

Customer:

I tried to get this done when we became a Ltd company but they refused to do so

Alex Watts :

Is there a Directors or shareholders agreement please?

Customer:

No - again I tried to get this doen but they were reluctant to do this as they felt the Company House Article was sufficient

Alex Watts :

And what do the articles say about selling shares etc please?

Customer:

It is very hard for me to make head of tale of it as it is in legal speak, but it is the same document that is issued to companies which register with company house

Alex Watts :

Ok - it sounds like it is bad news I am afraid. Unless you have a signed contract any party can pull out at any time

Alex Watts :

A contract is not binding until it is signed for this type of transaction

Alex Watts :

As for the share value dividend and salary, they can't just increase it to what they want.

Alex Watts :

They have to act in the best interest of the company and shareholders

Alex Watts :

If they raise the salary and reduce dividends you could seek protection under the new Companies Act 2006

Alex Watts :

You have rights as a minority shareholder

Customer:

Even if they have declared the value of the sale in an email to both myself and the accountant?

Alex Watts :

Yes, unless they said: We/I agree to buy your shares for £x value

Alex Watts :

If they did that then you could sue for breach of contract

Customer:

This is an extract of what he sent to the accountant in the email:

Customer:

"

Thank you for submitting the Directors Termination document to Companies House. Was this by post or online?

Frank and i reached a financial agreement yesterday. This includes Frank drawing his director's loan, a year’s salary, which covers the purchase of the shares by rove and retaining his car for the remaining period of the lease agreement. Jacky is also in agreement with this.

Please would you complete the required documentation for this to be expedited.

Once this has been done we can transfer the funds over for Frank.

Alex Watts :

So that was not sent by you, but to the accountant?

Customer:

No that was sent by the Director (Lead) in question to the accountant and was agreed by the second director and I was copied into it. That was the last correspondence I had on the subject (17 July 14), despite me emailing for updates and leaving call messages. The only information since then has been from the accountant.

Alex Watts :

Ok - potentially you could sue for breach of contract.

Alex Watts :

You need to write and set out your losses and request a payment within 14 days or say you will go to Court within 14 days. You should make sure you send this recorded delivery and keep a copy.


Alex Watts :

If they do not pay you then you can issue proceedings in the County Court. You can either do this online at: www.moneyclaim.gov.uk or by completing form N1 http://hmctsformfinder.justice.gov.uk/courtfinder/forms/n001-eng.pdf and take it to your local County Court.

Alex Watts :

The Court will then issue a claim which a copy will be sent to the Defendant who will have a limited time to defend it, if not you can enter Judgment and enforce.

Alex Watts :

If the matter is defended it will be set down for a trial. If the claim is for £10,000 or less it will be a small claim and you will not need representation.

Alex Watts :

Above £10,000 you will need a Solicitor to represent you at trial

Alex Watts :

Can I clarify anything for you about this today please?

Customer:

OK That is very helpful. I am hoping that common sense will prevail and it does not come to this as it will leave a bitter taste in the mouth. But it is useful to know what I can do if push comes to shove. Many thanks for your help. How can I take a print of our discussion so I can refer to it if need be?

Alex Watts :

Once you rate then the format changes. At that point you can come back to it at any time or copy and paste it.

Alex Watts :

Does this answer the question for you?

Customer:

Yes thanks - that was £28 well spent - just to get piece of mind. Thank you again Alex and have a good night.

Alex Watts :

If this answers your question could I invite you rate my answer before you leave today.

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