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Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3772
Experience:  Solicitors 2 years plus PQE
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I have a co-director who has taken considerable monies out

Resolved Question:

I have a co-director who has taken considerable monies out oif our bank account, and is nor trying to close the company down without re-imbursing the amounts. What do I do?
Submitted: 3 years ago.
Category: Law
Expert:  Alex J. replied 3 years ago.
Hi,
Thank you for your question and welcome.
My name is ***** ***** I will assist you.
Who are the shareholders of the company?
Does the company have any creditors?
How has he removed the money?
Kind regards
AJ
Customer: replied 3 years ago.

Myself (Allan Fletcher), Gerald Dixon and the director in question - Chris Churcher. The company has one major creditor. This debt is owed because another of Churcher's companies owes our company maney - he has now folded that company leraving us with his debt. One day prior to folding that company, he transfered some £10,000 into our company, then on the following day transferred £9,000 from our company to another.

He has subsequenty taken an additional £4,000 without authority.

Our rules are that two directors must sign for any money from the bank, but he has used a direct transfer mechanism toi achieve his end.

Expert:  Alex J. replied 3 years ago.
Hi,
Thank you.
Who are the shareholders of the company and it what percentage do you own the shares?
I think unfortunately you may have to face the prospect that this is theft and fraud and your best option may be to go to the police.
Does he have any personal assets or wealth?
Kind regards
AJ
Customer: replied 3 years ago.

We are all equal shareholders. He has other companies and assetts

Expert:  Alex J. replied 3 years ago.
Hi,
Thank you.
Do you have a shareholders agreement?
If you are equal shareholders you should start by considering removing him as a director, as you will only need an ordinary resolution to do this, but this obviously depends on whether you have a shareholders agreement that says anything to the contrary about director removal.
You should then contact your bank and get statements to show where the money has gone. I would also enquire with your bank as to why they did not honour the banking mandate.
I would then consider the following action:
1. The company sues him for the return of the money and breach of mandate;
2. You report him to the police for theft and mis apporpriation of company money.
Ultimately as a director he is in breach of S.172 of the Companies Act and failing to act in the best of interests of the company, potentially acting in conflict of interest and potentially failing to disclose this (which is also a criminal offence).
As a starting point have you asked him to return the monies?
Kind regards
AJ
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