How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Alex J. Your Own Question
Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3653
Experience:  Solicitors 2 years plus PQE
13113900
Type Your Law Question Here...
Alex J. is online now

Jo, I sold out 51% of company shares to a best friend

Customer Question

Hi Jo,
I sold out 51% of company shares to a best friend two years ago, due to the fact we were long term friends it was more or less a gentleman's agreement. we had the company valued at £750,000 at the time.
My friend agreed to pay £100,000 initially and the rest over the following three years with monthly payments.
My position was to not be involved with the day to day running of the business but be on hand to offer guidance and advise if required.
Sadly i was not consulted over a tendering process for a contract already held with the local authority and the company lost the contract due to tendering to high a rate for the care. ( the company is a care agency)
My friend and her partner liquidised the company and set up again continuing to run with the private care packages we currently held, many of the local authority care packages decided to stay with the company and became private clients. The company name was changed from Care Helpline Solihull LTd to Care Help Line West midlands limited.
i borrowed my friend ( the company back 30,000 to meet its PAYE demands with the promise from my friend i would get this back when the situation improved. ( this was before the liquidation)
My friend led me to believe i still owned 49% of CHL West Midlands LTD.
Within six months the Local authority fell into difficulties and offered the new company a contract at a lower rate than previous, My friend asked for my support to work in the company as a risk assessor and develop care plans, i worked relentlessly around 18 hrs a day 7 days a week to help build the company back up. i was told i would be employed and PAYE operated for any work i did for the company.
the money i was now receiving monthy was my wages i assumed, i manage to recruit and develop a good team. |On numerous occasions i requested access to the finances but was fobbed off one way or another by my Mrs Nugent (Director)
All of a sudden Mrs Nugent started emailing me saying she never wishes to speak to me again, blocked me from accessing the online care management system we work on for rostering and invoicing and has refused to discuss any of the issues with me. i am aware the finances have been miss managed and the company is owed a substancial amount of money. Mrs Nugent has imformed me the company owes a lot of money to HMRC (PAYE) she has stopped paying me what was agreed. Refused to allow me to continue in the job role i was doing and employed a new assistant manager.
I have checked on line and Mrs Nugent has set the company up with her as sole director with companies house. However Mrs Nugent did give me a share certificate some time ago.
Can you advise me if i have any rights ? Can Mrs Nugent just dimiss me in this manner with no adequate explanation ?
Seems i am getting done over by everyone i know...
Kind regards Jenny
Submitted: 1 year ago.
Category: Law
Expert:  Alex J. replied 1 year ago.
HiThank you for your question and welcome.My name is ***** ***** my colleague has asked me to assist you.There are a few issues here, can you confirm the following?- have you received all the money for the shares you originally sold? Did you transfer those shares to your friend?- were your wages paid net of National Insurance Paye etc?- what does the new share certificate say? Do you have shares in the new co?Kind regardsAJ
Customer: replied 1 year ago.

Hi Alex, sorry its taken me so long to come back to you, i have not received all the money that was agreed for the shares as i ended up working long shifts for the company and was told by Mrs Nugent i was PAYE. i never received pay slips and each time i asked to see finances i was fobbed off one way or an other. The share certificate i hold does say i have 49 shares in the new company.

Kind regards Jenny

Expert:  Alex J. replied 1 year ago.
Hi, Thank you. Is the Share Certificate signed by the director? A share certificate is normally absolute proof of ownership. You need to ensure that your shares are in the company that actually has assets.When you sold your shares in the old company did you sign a stock transfer form? It would be called a Form CON40G? If so did this have an agreed price on it for the shares? Kind regards AJ
Customer: replied 1 year ago.

My accountant dealt with the share transfer at the time, i do remember signing documents but cant be sure what those were now. i do have a share certificate for shares in the current company.

Expert:  Alex J. replied 1 year ago.
Hi, Thank you. Is your ideal resolution to sell these shares for a fair price? Can you confirm with the accountant whether you signed a transfer of the old shares?Kind regards AJ
Customer: replied 1 year ago.

i did sign a transfer of shares, do i have a right to view financial business transactions and do i have a right to participate in the day to day activities of the business if i wish to. At present i have been blocked from the business completely.

Expert:  Alex J. replied 1 year ago.
Hi, Thank you. No you do not unfortunately, only the directors can do this. What you can do is force the issue but it depends on what percentage of the shares own. If you own 49% who owns the other 51%? You need 51% to vote yourself on to the board and then view the finances and participate in the management. If you do own 49% the good news is you cannot be diluted or just have the company taken from you - however if the other shareholder is ignoring you, you may have to consider going to court and forcing them to buy your shares out. The procedure for this result from what is know as unfair prejudice of a minority shareholder under S.994 of the Companies Act 2006. The first thing you need to do is put your demands in writing, you need evidence you are being frozen out. I would then see if you can negotiate a sale of the shares - if you cannot then court action is a last resort.Is working with the other shareholder out of the question? I look forward to hearing from you. Kind regards AJ
Alex J. and other Law Specialists are ready to help you
Customer: replied 1 year ago.

thank you Alex for your advice.

Jenny

Expert:  Alex J. replied 1 year ago.
I wish you the best of luck. Kind regards AJ