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Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3557
Experience:  Solicitors 2 years plus PQE
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I am currently the sole director of a business that has 2 shareholders.

Resolved Question:

I am currently the sole director of a business that has 2 shareholders. The shareholders have fallen out. One shareholder works in the business the other has had no input at all not even financial. Is it possible to get a shareholder removed? Or is it possible to
Close this business and reopen another without the permission of the non active shareholder?
Submitted: 1 year ago.
Category: Law
Expert:  Alex J. replied 1 year ago.
Hi, Thank you for your question and welcome. My name is ***** ***** I will assist you. Are the shareholders equal shareholders? Kind regards AJ
Customer: replied 1 year ago.
Yea they are 1share each
Expert:  Alex J. replied 1 year ago.
Hi, Thank you. You cannot force the other shareholder to sell without a court order, and you cannot dissolve the company without a special resolution. The company is deadlocked. Would either shareholder be prepared to buy the other out? Kind regards AJ
Customer: replied 1 year ago.
Is there anything else you need?
Expert:  Alex J. replied 1 year ago.
Hi. Thank you. Do they have a shareholders agreement? Does the company have any assets? Kind regards AJ
Customer: replied 1 year ago.
I have spoken to one of the sharehokders (the one who works in the business) and doesn't believe there is a shareholder agreement. The 2 sharehokders used to be in another business together at a 49-51 shares but when this business was set up in August the other shareholder set it up equally without his knowledge so he is unclear as to exactlybwhatbthere is! With regards ***** ***** assets there are very little (salon chairs etc) but not a lot of value.
Expert:  Alex J. replied 1 year ago.
If the company does not have any assets and there is no shareholders agreement there is nothing to stop the active shareholder simply resigning as a director and starting a new limited company in competition - this would force the business to close. Does the active shareholder need to use the assets of old co to set up a new company?
Customer: replied 1 year ago.
Neither shareholders are directories. There's only one director who doesn't have any shares. The assets would really be wanted to use in new co.
Customer: replied 1 year ago.
Can the active shareholder and director set up new co to trade in current premises?
Customer: replied 1 year ago.
Can the director and one shareholder resign and set up new co trading in the same premises using same name?
Expert:  Alex J. replied 1 year ago.
Hi, Thank you. If they are going to use the assets and premises of old co they will need to buy them off old co and therefore will need the consent of the old shareholder.
Customer: replied 1 year ago.
Ah ok. So the only way to remove the other shareholder is to get him to agree?
Expert:  Alex J. replied 1 year ago.
Hi, Thank you. Yes you need to get them to agree to sell their shares or you need to get them to agree that the company is going no where and it should dissolved and the assets sold. This does not stop either shareholder leaving without the assets however. You could proposed that they get the company account to come up with a valuation for the shares that they are both bound by, and then arrange for a sale of the shares from one shareholder to another?
Alex J., Solicitor
Category: Law
Satisfied Customers: 3557
Experience: Solicitors 2 years plus PQE
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