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UKSolicitorJA
UKSolicitorJA, Solicitor
Category: Law
Satisfied Customers: 4312
Experience:  English solicitor with over 12 years experience
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I'm co sec of a co that intends to sell land .

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I'm co sec of a co that intends to sell land . Some dirs and members want to redirect some (substantial) proceeds to philanthropic ends even though there are no objects permitting this. Shares are all ordinary. Objecting members need to understand their position. Can the redirection of profit be stopped? Does it require Ordinary or Special res (or more)?
Submitted: 2 years ago.
Category: Law
Expert:  UKSolicitorJA replied 2 years ago.
,
When was the company incorporated?
Customer: replied 2 years ago.
2011
Customer: replied 2 years ago.
Waiting to hear. I need to do something else now, so may not be able to reply hour or so if needed.
Expert:  UKSolicitorJA replied 2 years ago.
Thank you.
As it was incorporated after 2009, it does not require an objects clause such as a philanthropic giving clause.
The board of directors acting as a majority may pass a board resolution to the effect that the funds are to be gifted purposes.
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Customer: replied 2 years ago.
If the members object tho what recourse do they have against the directors?
Customer: replied 2 years ago.
Back now.
Not sure you got it. The point is shareholders bought the shares, in the expectation of making a decent profit, but this is being thwarted by arbitrary decisions that restrict their return. Many regard this as unjust and a breach of the duty of directors to safeguard resources in the interests of the members and not to spend it on personal hobby horses.
Expert:  UKSolicitorJA replied 2 years ago.
The members may remove these directors by passing an ordinary resolution of a general meeting of which special notice must have been given under S. 168 of the Companies Act.

The members may also pass an ordinary resolution directing the directors not to spent the company's monies in a certain way as specified in that resolution.

Hope this helps

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