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JGM
JGM, Solicitor
Category: Law
Satisfied Customers: 11148
Experience:  30 years as a practising solicitor.
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I manage a small company as a working director. The second

Customer Question

I manage a small company as a working director. The second director deals with the finances of the business. I have not been able to get in touch with him since November last year and certain matters need to be addressed. How to I go about tracking him down and what rights do I have to take over the affairs of the company?
Submitted: 2 years ago.
Category: Law
Expert:  JGM replied 2 years ago.
Thank you for your question.
This is quite unusual.
Do you know his address?
Who are the shareholders of the company?
Customer: replied 2 years ago.

Yes I do know his address but he lives in Broughty Ferry and me Ayr. He is the only shareholder with £100 sharecapital.

Expert:  JGM replied 2 years ago.
He owns the company then. But as a director you are entitld in him absence to run the company, although as you know his address, you don't have to track him down, you just have to get him to respond.
Happy to discuss further.
Customer: replied 2 years ago.

We are in difficulty with HMRC who he always deals with, should I speak to them on the phone I have never had any experience of the finances I manage and sell on a day to day basis. He has no working involvement with him at all yet he takes a monthly salary and has a company credit card which he uses for day to day spending thats the only reason I know he is in the country. Anyway our bookeeper is retiring andshe has said that he promised her an extra 2500 when she retires at the end of the month. I have no knowledge of this so she thinks she can just take the money in her salary?

Expert:  JGM replied 2 years ago.
Get the company accountants to deal with HMRC if you're confident in doing so. Don't pay the bookkeeper the extra until he gets in touch with you.
I suggest you pay him a visit. Or stop his credit card which might get him to get in touch.
Customer: replied 2 years ago.

I was always lead to believe he was my boss and I was a director in name only because when he took over the company I had worked with the previous owner for 20 years.Am I jointly liable to him for the companies conduct even although I havent been involved?

Expert:  JGM replied 2 years ago.
If you're a director you have the same director's responsibilities as him even though he owns the company as the sole shareholder.
You are entitled to take decisions in the best interests of the company.
Customer: replied 2 years ago.

How can I get him out of the picture if he owns the company?

Expert:  JGM replied 2 years ago.
You can't short of buying his shares from him.
Customer: replied 2 years ago.

So in effect Im working my socks off to fund his lifestyle with the added worry of HMRC shutting us down?

Expert:  JGM replied 2 years ago.
From what you say, yes, it would appear that way.
Customer: replied 2 years ago.

How could I buy the company from him - he still owes 150k to the previous owner and has not kept up on the repyments?

Expert:  JGM replied 2 years ago.
It doesn't sound like it's worth buying if there ar debts to HMRC and the previous owner but you may want to take accountancy advice to see if there is a way to make him an offer that would also enable you to trade out of the difficulties. This is really outwith the scope of any help I can give you.
JGM and 2 other Law Specialists are ready to help you
Customer: replied 2 years ago.

One final question - could the previous owner take the company back?

Expert:  JGM replied 2 years ago.
That depends whether provision is made for that in the sale agreement they had.