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Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3775
Experience:  Solicitors 2 years plus PQE
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I have inherited 1/3 voting shares in a family business. The

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I have inherited 1/3 voting shares in a family business. The directors (between them own 2/3rds). They have refused to register my shares which they can do as per the mem and arts. They have offered to buy them at a valuation based on the companies 2013 figures.
They are now saying they are taking legal action to obtain ownership of my shares which will give them 100% control of the company especially as certain changes to the mem and arts requires a 75% majority.
Can they do this?
Robert
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. They cannot make any changes to the company which require a special resolution for example changing the articles of association. As a minority shareholder you do have rights and protections against being unfairly prejudiced under S.994 of the Companies Act 2006, but this is a last resort. What do the articles say about refusing to register your shares? Are they Table A articles? Do you have the share certificates?

Customer: replied 1 year ago.
Articles state"the directors may in their absolute discretion decline to register the transfer of any share and shall not be bound to state the reason for any such refusal".
This, in my opinion does not relate to ownership. These shares were bequeathed to me. When the mem and arts were incorporated in 1937 they were done in such a way that no 2 directors could "gang" up on another to change the mem and arts. A 75% majority was required. My uncle "chairman and director" on passing away left his shares to his wife " my aunt" and the company registered these shares. On her death she left them to me. The shares represent our side of the family.
The directors have never contacted me directly regarding these shares. I am also the 3rd largest shareholder of A ordinary shares.
The directors have stated that they will never register my shares and it is unlikely that any dividends will be paid to shareholders for many years.
I do not have a share certificate regarding thes voting shares as they are not registered.
I view this as an attempt for the current 2 directors " my cousins" to gain total control of the company.
The executor of my Aunt sent a transfer of these shares document to companies house, the company and myself.
Can they legally go to court to take ownership of these shares?Robert
Expert:  Alex J. replied 1 year ago.

Thank you. I agree you are correct, the registration and the ownership are separate matters. You are the beneficial owner of the shares. If they refuse to register you or negotiate a fair valuation, you can either:

(i) go to court and sue in order to be registered;

(ii) Sue for a fair valuation of the shares.

Do you actually want to be involved in the management of the company?

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