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UKSolicitorJA
UKSolicitorJA, Solicitor
Category: Law
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Experience:  English solicitor with over 12 years experience
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I am a 50:50 shareholder and Director of a company in the UK.

Resolved Question:

I am a 50:50 shareholder and Director of a company in the UK. I wish to resign as a Director but keep my shares until a settlement is reached.
However does this clause in our shareholders agreement prevent that?
10.1.1 If an Employee Member ceases to be a director or employee of the Company or any of its subsidiaries and does not continue in that capacity in relation to any of them, Transfer Notices shall be deemed to have been served on the relevant Termination Date in respect of all Shares held by the Employee Member immediately before such cessation
Submitted: 2 years ago.
Category: Law
Expert:  UKSolicitorJA replied 2 years ago.
Hello,

Please upload the shareholders agreement using the paperclip icon as it is difficult to advise you without it.
Customer: replied 2 years ago.
Expert:  UKSolicitorJA replied 2 years ago.
Thank you.

Clause 10 deals with the mandatory transfers of share on cessation of you being a director of the company and you need to agree on the sale price of your shares with the other director and failing such agreement, the provisions of clause 11.2 will apply.

Clause 11.3 states that all your shares will be transferred in the deemed transfer notice.

So the date you resign as a director, you will be deemed to have served a transfer notice to sell your shares.

May I help further?
Customer: replied 2 years ago.
Thank you, ***** ***** event the offer price is not acceptable, what would happen in that case?
Expert:  UKSolicitorJA replied 2 years ago.
In that case, the provisions of clause 11.2 provide as follows:

If the Vendor and the directors are unable to agree a price within 28 days of the Transfer Notice being given or being deemed to have been given, the Sale Price will instead be the price which the Accountant shall certify to be in his opinion the Fair Value. If the Members cannot agree on the appointment of a Registered Auditor, then any Member may apply to the Institute of Chartered Accountants of England and Wales to make such appointment. The cost of such application shall be borne by the Members rateably according to the value of their Shares. In arriving at his opinion, the Accountant will value the Shares on a going concern basis as between a willing seller and a willing buyer, ignoring any reduction in value which may be ascribed to the Sale Shares by virtue of the fact that they represent a minority interest and on the assumption that the Sale Shares are capable of transfer without restriction. The decision of the Accountant as to the Sale Price shall be final and binding

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UKSolicitorJA, Solicitor
Category: Law
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Experience: English solicitor with over 12 years experience
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