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Ash
Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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Dear Sirs. About a year and half ago I was made a director

Customer Question

Dear Sirs. About a year and half ago I was made a director and given a third of the shares for a figure of £50k. There has not been any formal agreement in relation to this arrangement and there is only a shareholders agreement. I have tried to raise the
amount of £50k but to date I have not been able to. Apparently the company bank says it won't lend to the business in order to provide a loan for me to repay. The arrangement did not provide for any penalties if the monies were not paid for the shares by any
specified date. Today the other 2 directors took delivery of a company car each which is paid for by the company. An electric vehicle for tax purposes. My car was cancelled because the £50k was not paid for the shares. As I say, there has never been any mention
of penalties when the arrangement was entered in to until the cars were due to be ordered when I was told that mine would not be because of the non payment. Also the other 2 directors have sent an email to me to say that unless a payment plan is arranged,
then they want to have the shares transferred back and for me to become a consultant or employee. Is there anything I can do?
Submitted: 2 years ago.
Category: Law
Expert:  Ash replied 2 years ago.
Hello my name is ***** ***** I will help you with this.
What is it you want to achieve please?
Customer: replied 2 years ago.
Dear Alex. Good question! Firstly I guess I would like to know whether the other directors can simply say your car is cancelled due to the fact that you have not paid the monies for the shares as yet. Despite this being the first I was told about it. Can they simply say that they want the shares transferred back? Again with no mention this until now! Do I want to stay as consultant or employee? Employee no. Consultant I feel would diminish rapidly and they would get someone else in. Do I have any recourse?
Expert:  Ash replied 2 years ago.
But nothing in writing that says they can, right?
Customer: replied 2 years ago.
Which part does your response refer to Alex?
Expert:  Ash replied 2 years ago.
The arrangement........
Customer: replied 2 years ago.
Nothing at all.
Customer: replied 2 years ago.
Other than the shareholders agreement. The usual agreement setting out dealings with the shares but nothing relating to the above.
Expert:  Ash replied 2 years ago.
Ok, let me give this some thought overnight if I may?
Customer: replied 2 years ago.
Of course. Can we pick this up tomorrow?
Expert:  Ash replied 2 years ago.
Sure
Customer: replied 2 years ago.
Hi Alex. Hope it did not keep you awake?
Expert:  Ash replied 2 years ago.
Yes I have been thinking about this carefully. In short in the absence of any agreement that says they can levy these penalties on you - then they can't. If they wanted the ability to take away your car or the transfer shares back then the agreement should have said that.
It did not and therefore they can not do it. The contract has been poorly drafted.
Can I clarify anything for you about this today please?
Alex
Customer: replied 2 years ago.
Hi Alex. Thank you. You say the contract was poorly drafted. There was no contract but I guess you mean the shareholders agreement. So how do I respond to them?
Expert:  Ash replied 2 years ago.
Correct.
You ask them on what basis they have the power to do this - where is it in the contract that allows them?
They dont have anything, so they cant do it.
Does that help?
Alex
Customer: replied 2 years ago.
Yes thanks Alex
Expert:  Ash replied 2 years ago.
Great. Good luck.
Alex
If this answers your question could I invite you rate my answer before you leave today.
If the system won’t let you please click reply.
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Customer: replied 2 years ago.
Hi Alex. One thing on this please? I have a meeting tomorrow with the other 2 tomorrow. They say the agreement is void for lack of consideration. But again this was not mentioned. Can they introduce this late in the day?
Expert:  Ash replied 2 years ago.
No. It should have been raised earlier.
Does that help?
Alex
Customer: replied 2 years ago.
So Basically I just stand my corner and I don't really have to say anything? One of them said in reliance of the shares monies he had spent his money. I guess he should have waited.
Expert:  Ash replied 2 years ago.
I agree. It should have been in the contract if they wanted you out for default.
Can I clarify anything else for you?
Alex
Customer: replied 2 years ago.
No Alex. Just getting my corner sorted for tomorrow. I feel happier talking to you and got the right person. I cannot thank you enough. On a final note, if I chose to, can I reserve my position at tomorrow's meeting and email them both later with my response? Once you respond I will do the rating thing and rest assured it will be the best one. Thank you so much. Don't know how you do your job dealing with these issues all day every day.
Expert:  Ash replied 2 years ago.
Yes this is your right, they can't force a respond. You can even say you want everything in writing.
Does that help?
Alex
Customer: replied 2 years ago.
Great thank you Alex. Have a good evening.
Expert:  Ash replied 2 years ago.
And you. Please do remember to rate my answer before you go today!
Alex
Expert:  Ash replied 2 years ago.
If this answers your question could I invite you rate my answer before you leave today.
If the system won’t let you please click reply.
Please bookmark my profile if you wish for future help: http://www.justanswer.co.uk/law/expert-alexwatts/