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Jo C.
Jo C., Barrister
Category: Law
Satisfied Customers: 30929
Experience:  Over 5 years in practice
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I am an equal partner and owner of a few companies with one

Customer Question

I am an equal partner and owner of a few companies with one other person where the shareholding is equal. I am the director and he is the managing director. The business we operate is a property company.
The larger major building projects are being organised and accounted the business accounts, by the other director and a builder and it is not transparent. I would like to break this up but I am being ignored. I now need to take legal action, if I can.
Submitted: 1 year ago.
Category: Law
Expert:  Alex J. replied 1 year ago.
,
Thank you question and welcome.
My name is ***** ***** I will assist you.
Do you have a shareholders agreement?
Is the builder of these larger projects connected to this director in anyway?
Are you worried the director is making a secret profit from it?
Kind regards
AJ
Customer: replied 1 year ago.
,
Unfortunately we do not have a Shareholders agreement. The major works contractor is a friend of my business partner and they could be making a secret profit, so I would like to block that possibility. How can I officially do this?
Expert:  Alex J. replied 1 year ago.
,
Thank you.
I will draft a response with some practical advice.
This may take me some time so please do not be concerned if you do not hear from me right away. I will aim to respond to you by this evening.
Kind regards
AJ
Expert:  Alex J. replied 1 year ago.
,
Thank you.
There are provisions under S.172 -177 of the Companies Act 2006 whereby a director must:
- Act in conflict of interest;
- Not to make a secret profit
- To act with independent judgment;
- To act in the best interests of the company.
If the director has made a secret profit or acted in breach you can potentially bring a derivative action under S.260 of the Companies Act to have the monies accounted for. This would be a worst case scenario.
Can you tell me the following:
- Do you have access to the company bank accounts?
- Can you tell me how the company was formed? Was it created as a partnership initially?
Kind regards
AJ
Customer: replied 1 year ago.
We have a partnership and some companies, they all hold freehold ground rents. I am the accountant but the surveyor/contractor collects the money from the leaseholder before work commences and it is accounted the company or partnership. This is only done on the major works and he liaises with my business partner. I want to account within the business and would like to present them with something legal to help persuade. What about an contract?
Expert:  Alex J. replied 1 year ago.

Thank you.
How is the building work invoiced to each company? When you say it is done outside the company I assume the company still pays invoices?
Kind regards
AJ
Customer: replied 1 year ago.
,
There is a consultation process with the Leaseholders, then money is asked to pay the contractors, none of this I see. This is not accounted my business accounts, unless not enough is collected upfront, then the difference is paid and accounted me and collected from the Leaseholders later in the same way as the smaller maintenance work, cleaning, gardening etc. Is there a way I can force them to make this transparent, discussions with my business partner isn't getting me anywhere?
Customer: replied 1 year ago.
Can I have an answer to my last reply, is anyone there?
Expert:  Nicola-mod replied 1 year ago.
,
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 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 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 .
Thank you!
Nicola

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