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Ash, Solicitor
Category: Law
Satisfied Customers: 10914
Experience:  Solicitor with 5+ years experience
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I wrote to you recently about our dispute with IdeasWise ltd. They are now sending us sol

Resolved Question:

I wrote to you recently about our dispute with IdeasWise ltd. They are now sending us solicitors letters demanding this that and the other. I have new question for you about shareholders' rights.
We were founders, directors, minority shareholders and employees of the company. We resigned as employees and directors because of bullying. We left less than 12 months ago so we are still liable under some clauses in the employment contract, specifically competition.
The letters from the solicitor are not from the company, but from the major shareholder. They allege we are violating clauses in both the shareholders agreement and our employment contracts.
My question to you is - does the major shareholder have standing in this? Surely only the company can sue us over the employment contract? Can a fellow shareholder sue us over alleged violations of the shareholders agreement?
Submitted: 1 year ago.
Category: Law
Expert:  Ash replied 1 year ago.
Hello my name is ***** ***** I will help you with this.
Have you violated any clauses?
Customer: replied 1 year ago.

I don't think I have violated clauses, they do.

The issue is as follows:

My job is writing literacy programs. I am very good at it, he said modestly.

They are a UK company - IdeasWise Ltd - who sell one product - a remedial literacy program for English schoolchildren - in the UK. I worked with them from 2012 till last year writing that program.

Since 2006, I have also worked with an Indian company - ReadingWise Education Programs Pvt Ltd - that creates literacy programs in Hindi, English and other Indian languages for India.

The competition clause in my UK contract just says:

"he or she shall not ... carry on or be concerned, engaged or interested in any capacity in any trade or business competing with the trade or business of the Company"

They say that by operating in India, we "will be" in competition with them.

Bear in mind that under Indian rules, they would not be allowed to trade in India - they would have to set up an Indian company with Indian directors and get special permission to bring foreign currency into the country to set it up. Which means it would be different company to the UK one.

But my employment contract with the UK company acknowledges that while working for the UK company, I also work with the Indian company!

I was working for the Indian company before, during and after my employment with IdeasWise Ltd.

Expert:  Ash replied 1 year ago.
So they are in the UK and you will be doing this in India?
Customer: replied 1 year ago.

They are in central London. They sell their program to individual schools in England. Last time I checked, they have less than a dozen customers.

I have not operated at all in the UK since we left their company last year. I live in Spain and I write programs for India. I go there every few months. My customers are large NGOs, conglomerates, and state governments. I am just continuing to do what I have been doing ever since 2005.

Expert:  Ash replied 1 year ago.
Then I would not worry. Even if there was a worldwide clause when it comes to enforcement they would need a UK court order. The court would then look to see if the Clause was fair and reasonable.
If they are trying to stop you from working from any other competitor anywhere in the world then the court would find this unreasonable. If it was within the local area for say 12 months, then that would be different. But worldwide for an indefinite period is wholly unreasonable.
Can I clarify anything for you about this today please?
Customer: replied 1 year ago.

Thank you.

But I am now certain they will throw something else at us!

My original question is - the letters are coming from the solicitor for the majority shareholder. EVEN if we had violated clauses (which we haven't), does the majority shareholder have standing to sue us? Surely only the company can sue us, because our contracts are with the company, not the majority shareholder.

In other words, does Foss v Harbottle apply? (Yes, I've been googling!)

Expert:  Ash replied 1 year ago.
No the shareholder doesn't. It must be the company.
Does that helP.?
Customer: replied 1 year ago.

YES! Thank you.

I suspect that they are using the shareholder as the complainant because they don't want the company vulnerable to disclosure. It's the only reason that makes sense.

So I am going to write back to the solicitor and say something to the effect of "I will not discuss this with you as your client does not have standing in the matter."

Expert:  Ash replied 1 year ago.
Yes indeed.
If this answers your question might I 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.
Ash, Solicitor
Category: Law
Satisfied Customers: 10914
Experience: Solicitor with 5+ years experience
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