There is no shareholder agreement unfortunately.
He will have proof of the fraud - he's requested bank statements so should have this later this week.
Neither of them invested any capital as such (that I'm aware of), other than my friend put some equipment etc that he owned into the company
They owe £7k to suppliers (there isn't currently enough money to pay these due to the money having been stolen). There is a small amount of money due into the company from jobs that are going through. They also have clients on monthly retainers (not a huge amount - circa £10k per month). In addition to the money that has been stolen, he has also taken payment by way of leather jackets for his family rather than charging for a job, which I guess is also effectively theft from the company.
Thanks Alex. Appreciate your help...
Yes he could definitely leave and I think most of the clients would go with him. There is no agreement to say that he can't take the clients with him.
However, he is reluctant to walk away from the company name, as they have spend a lot of time and money promoting the name and they have a twitter account with over 8000 followers.
Thanks Alex, that's great.
What would your perspective be with respect to the "fiddled" VAT bill?
Would my friend be partly responsible for that? He didn't know about it at the time, but it has now been brought to his attention of course.
I think they are going to dissolve the business, and my friend would then start an identical business with a similar name, and hope to move the majority of the clients across.