Our company is called The Bark Park – registration number – 9051859 I was made redundant last year and decided to set up a small business with a friend – we did not enter into a shareholder agreement, there is nothing in writing.
We were both initially Directors and both invested £10K in the business to set it up.
We both worked at the business without taking a wage for 6 months.
After some time it was apparent that I could not continue to do this as my redundancy was running out and my friend and I did not see eye to eye and things were not great. She suggested I resign as a director and keep my shares which I did, stupidly but I was bullied into this as without enough knowledge otherwise. She is still a director and shareholder.
When we set up the company we used accountants to set this up and we both were given 1 share each at a cost of £1 – therefore we were 50% shareholders each.
I still have £10,000 invested in the company for which she has agreed was a directors loan, the company is paying me back at a ridiculous £25 per week as she says that’s all they can afford.
Can you tell me the following:-
Am I classed as a 50% shareholder is just 1 share?? Am I classed as a part owner? She says im just a shareholder have no rights.
If I want to sell my shares I have to get her to agree apparently – she told me we have to have a meeting and vote but there are only two of us so how can we vote. Therefore who has the vote at a meeting – deadlock ?
The agm she will present the accounts and I believe it will be very unpleasant – how can we vote if we both disagree ? who has the say over who?
She is looking at adding another investor – can she do this without my permission, can she dilute the shares without my permission.
Can I ask for independent accounts audit as I don’t trust her accountant or her.
I note that she has used the company bank account to pay for fuel and paid herself a wage in December after I left – can she do this ?
Hello my name is ***** ***** I will help you with this.
1) Yes even with 1 share you are 50% shareholder if you have 1 share each
2) You can sell the shares to whoever you want, unless there is an agreement to the contrary that says you need the others approval
3) As for the accounts, they must be approved by the majority. If not then they are not agreed.
4) Yes she can look for another investor but you will still own 50%. It can't be diluted down without your permission
but there are only 2 of us so how can there be a majority?
5) She can only pay for business relared expenses.
But your articles of association should say what happens with a deadlock
Can I clarify anything for you about this today please?
her accountant told me that we have to have a meeting if I want to sell my shares and vote? is this wrong then
This only happens if it says so in the Articles of Association
ok so I need to read the articles.
Yes you do. It will all be in there
Does that help?
yes somewhat - can she add shares to dilute mine?
No, not unless the Articles says she can
ok thanks Alex best read the articles and see if I can make sense of them - if not can I pay extra for you to read and confirm for me?
Yes of course it would be a pleasure to help.
Can I clarify anything else for you at the moment?
nope thanks that's great
Great. If I could ask you to rate my answer before you go today please, the button should be at the bottom of the screen
If you need more help please click reply?