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Buachaill
Buachaill, Barrister
Category: Law
Satisfied Customers: 10527
Experience:  Barrister 17 years experience
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I am a 50% shareholder and there is another 50% shareholder

Resolved Question:

I am a 50% shareholder and there is another 50% shareholder who is the sole director. We each have separate offices near our homes. I signed the rental agreement for mine and he did for his, both using the company name. Due to a dispute with him, he has stopped the payments from the company to the landlord for my office. I as a 50% shareholder, signed mine 2 years ago and the company paid the cost of mine each month which they have done for 2 years. Does the company have to abide by the 1 months notice rule for rental payment in order to cancel, or because I signed the agreement as a non director, is the company not liable?
Submitted: 1 year ago.
Category: Law
Expert:  Buachaill replied 1 year ago.
1. The company does not owe you are one months notice agreement, as the one month notice requirement only applies in relation to rental agreements. The relationship between you and the company is not a rental agreement and so the one month notice requirement applicable to tenancies does not apply. Instead the agreement is terminable at will ie when one party wants, as an agreement of this nature can be terminated at any time. The fact you might not be a director today or were not when the agreement was signed makes no difference to the situation.
Customer: replied 1 year ago.

So, as the rental agreement for my office, is In the name of the company, the company is not liable to give notice, as I signed the lease as im not a director?

Expert:  Buachaill replied 1 year ago.
2. You are conflating two different agreements. There is an agreement between the company or you personally and the landlord for the rent of your office. This is the rental agreement. Secondly, there is an agreement for reimbursement between you and the company. This is the reimbursement agreement. The provisions of the first agreement, the rental agreement, are different to the terms of the reimbursement agreement. The rental agreement provides for one month's notice. However, the second agreement, the reimbursement agreement, between you and the company, has no notice provision and is terminable at will. So avoid confusing the two of them. The issue of whether you are a director or not is of no relevance to the existence of the two agreements.
Customer: replied 1 year ago.

Sorry, I'm not explaining properly. The rentel agreement is between and landlord and and the company only. I however signed the agreement 2 years ago as an employee of the company. The company has been paying the landlord themselves for 2 years and have stopped without notice. Is this contract void as I signed as I am only an employee.

Expert:  Buachaill replied 1 year ago.
3. This is a different factual situation to the one you outlined in your initial question, when you said you were renting the office. If the rental agreement is between the landlord and the company, then it is the company who owe the one month's notice to the landlord and they must pay over the rent. If the company hasn't paid the rental monies, then the landlord have a right of action against the company. This contract is not void merely because you signed the rental agreement as an employee. Once you had ostensible and actual authority to bind the company, and did bind the company, as evidenced by the company commencing to make rental payments, then the company are bound to the contract. The company cannot subsequently seek to resile from the rental agreement by asserting you were merely an employee.
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