How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Jo C. Your Own Question

Jo C.
Jo C., Barrister
Category: Law
Satisfied Customers: 30929
Experience:  Over 5 years in practice
12826847
Type Your Law Question Here...
Jo C. is online now

I am the Sole director of the family business (ltd company)

Customer Question

I am the Sole director of the family business (ltd company) and I run the company on a day to day basis and have done for 15 years. My grandparents who set up the company passed away (2 and a half years ago) but it is still unclear who their shares have passed too as their daughter, who is the executor to their Will, refuses to have anything to do with me or the company. She will not apply for probate and I am in the middle of hopefully getting a citation to force her to do so. What I want to know though is am I entitled to increase my remuneration as the only director or do I need to seek shareholder approval? Obviously shareholder approval is impossible.
Submitted: 2 years ago.
Category: Law
Expert:  Alex J. replied 2 years ago.
Hi,
Thank you for your question and welcome.
My name is ***** ***** I will assist you.
Do the articles of association contain any provisions in relation to directors declaring their interest in transactions over which they have a proposed interest?
Kind regards
AJ
Customer: replied 2 years ago.

Hi AJ

I thought you might ask about the articles of the company. I have had a look through and can't make anything out that seems relevant to your question. Bearing in mind this company was formed in the 1940's and the articles date back that far then they are very old! I did see a condition that there must be a minimum of 2 and no more than 5 directors which with only me, we no longer adhere too, but then i know the law has changed with small companies anyway. Hope this information is useful but perhaps as such you are unable to give me an informed decision?

Expert:  Alex J. replied 2 years ago.
Hi,
Thank you.
Does the company use Table A Articles from the Companies Act 1945?
Kind regards
AJ
Customer: replied 2 years ago.

Hi AJ

Yes the articles do refer to Companies Act 1985. Te original Articles being that of The Companies Act 1948.The reference to the 1985 Act mentions "44 The company may purchase it's own shares"?

Expert:  Alex J. replied 2 years ago.
Hi,
Thank you.
I will write a response it may take some time so please do not be concerned if you do not hear from me right away.
I would not consider the share buy back because you still need a special resolution to be able to do this. Further more the company will still need shareholders.
I will revert to you as soon as possible.
Kind regards
AJ
Expert:  Alex J. replied 2 years ago.
Hi,
My apologies for the delay, I am just typing an answer now.
Kind regards
AJ
Expert:  Alex J. replied 2 years ago.
Hi,
Thank you.
Ultimately you are the director of the company and you are responsible for its management. If you simply awarded yourself a higher salary for commercial reasons (i.e your paying yourself market rate etc) then that is up to you. The risk you run is the following:
- If someone ever stands up and claims to be the shareholder they could sue you for breach of your duties under S.172 on wards of the Companies Act 2006 - you may then have to repay part of the higher salary;
-If the company goes insolvent, if remuneration was in anyway excessive, you may have a personal claim against you for the company debts.
Currently you are acting in breach of the articles of the company if you are acting as a sole director, when it says you need to two directors. Furthermore even if you appointed other directors to approve your remuneration (which would be the best way to go about it ) - the fact is, it is still potentially a conflict of interest and that puts you at risk from a claim from the shareholders (whoever they are).
Can you tell me anything about the declaration you have asked for? Do you have any evidence to suggest that the shares might have been left to you?
Kind regards
AJ
Customer: replied 2 years ago.

Hi Aj

Thanks. The shares were due to be left to me and the Will I hold in which I was the executor says as such. Since my Grandmother's death though, my Aunt (my Grandmother's daughter) refused access to the house and any papers in order to administer the estate. She claims to be the executor which she has provided evidence of to the probate registry (I took out a Subpoena) in the form of two codicils, one of which the probate registry confirmed but as I am no longer the executor they would not allow me to see the other and it's contents. My Aunt has been incredibly difficult to deal with and that is why I now have gone with a Citation. She has shown absolutely no interest in the business whatsoever but I live in fear that the other codicil passes the shares to her. If that were the case obviously I would challenge and as you point out she would do exactly what you say with regard to the increase in remuneration. I just hope it doesn't come to that. There is no question of my salary putting the company's finances at risk. Actually it's based on the profit anyway and considering I've been here 15 years, have a wife and 2 children to take care of despite the situation with the business, I do not think my actions could be deemed irresponsible.

James

Expert:  Alex J. replied 2 years ago.
Hi,
Thank you.
I have just received this and I am reviewing it now.
Kind regards
AJ
Expert:  Alex J. replied 2 years ago.

Hi< Thank you for your patience my apologies for the delay. Have you applied to the probate registry to obtain a copy of the will? What exactly does the company do? Kind regards AJ

What Customers are Saying:

 
 
 
  • Thank you so much for your help. Your answers were really useful and came back so quickly. Great! Maggie
< Previous | Next >
  • Thank you so much for your help. Your answers were really useful and came back so quickly. Great! Maggie
  • A quick response, a succinct and helpful answer in simple English. I believe I can now confront the counter party with confidence -- worth the 30 bucks! Rick
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP
  • I couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin
  • Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. Esther
 
 
 

Meet The Experts:

 
 
 
  • Jo C.

    Jo C.

    Barrister

    Satisfied Customers:

    30316
    Over 5 years in practice
< Last | Next >
  • http://ww2.justanswer.com/uploads/EM/emus/2015-7-7_192327_bigstockportraitofconfidentfemale.64x64.jpg Jo C.'s Avatar

    Jo C.

    Barrister

    Satisfied Customers:

    30316
    Over 5 years in practice
  • http://ww2.justanswer.com/uploads/BE/benjones/2015-12-1_0437_ennew.64x64.jpg Ben Jones's Avatar

    Ben Jones

    UK Lawyer

    Satisfied Customers:

    11553
    Qualified Solicitor - Please start your question with 'For Ben Jones'
  • http://ww2.justanswer.com/uploads/BU/Buachaill/2012-5-25_211156_barrister5.64x64.jpg Buachaill's Avatar

    Buachaill

    Barrister

    Satisfied Customers:

    1754
    Barrister 17 years experience
  • http://ww2.justanswer.com/uploads/JO/jojobi/2013-3-19_0265_maxlowryphoto.64x64.jpg Max Lowry's Avatar

    Max Lowry

    Advocate

    Satisfied Customers:

    894
    LLB, 10 years post qualification experience
  • http://ww2.justanswer.com/uploads/UK/UKLawyer/2012-4-12_9849_F2.64x64.jpg UK_Lawyer's Avatar

    UK_Lawyer

    Solicitor

    Satisfied Customers:

    750
    I am a qualified solicitor and an expert in UK law.
  • http://ww2.justanswer.com/uploads/KA/Kasare/kasare.64x64.jpg Kasare's Avatar

    Kasare

    Solicitor

    Satisfied Customers:

    402
    Solicitor, 10 yrs plus experience in civil litigation, employment and family law
  • http://ww2.justanswer.com/uploads/OS/osh/2015-7-7_19268_gettyimagesb.64x64.jpg Joshua's Avatar

    Joshua

    Lawyer

    Satisfied Customers:

    8199
    LL.B (Hons), Higher Prof. Dip. Law & Practice