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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3833
Experience:  FCCA FCMA CGMA ACIS
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Hello, I am director of a limited company, my business

Customer Question

Hello,

I am director of a limited company, my business partner and I are 50/50 shareholders. I'm afraid we have none of the following documents: Shareholders agreement, directors contract of employment, directors loan agreement. The business has moved very fast and excuses excuses etc etc. I would like to resign as director and be bought of the business.

Can I freeze the business bank account while myself and my partner are in discussions?

Thanks
Submitted: 3 years ago.
Category: Tax
Expert:  bigduckontax replied 3 years ago.
Hello, I'm Keith and happy to help you with your question.

Unless you are in dispute with your business partner I would think this most unwise as it would seriously interfere with the day to day running of the firm. You should negotiate with your partner as to an agreed settlement so your shares can be purchased to buy you out of the business. Whether one partner could freeze the bank account unilaterally would depend upon the bank mandate set up when the account was opened. From a limited company you can, of course, resign as a director at any time, merely notify Companies House of the resignation on the appropriate form or on line.

Should you be in dispute with the other shareholder then it would be wise to consult a local, trusted solicitor to conduct the negotiations on your behalf. This will cost, of course, and I trust can be avoided and the matter of your departure settled amicably.
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Customer: replied 3 years ago.

I'd like to take some money out of the business before I leave but have no leverage as the shares are worthless.


 


So I need a bargaining chip else my business partner will simply leave money in the business until I am gone. There is always the lawyers route but that would help no one, I just need a little leverage and I'll ask for so little that we'll settle quickly and it'll be done.


 


I don't suppose you would know whether it is likely in a standard small business current account mandate?


 


Thanks

Expert:  bigduckontax replied 3 years ago.
Bank mandates differ from bank to bank. However, the route for you to freeze the account may be open, you can but visit the bank branch and see. I had not realised things had come to such a pretty pass. Freezing the accounty may be the only bargaining chip you have available.
Customer: replied 3 years ago.

Perhaps it hasn't. However it's my own silly fault for not sorting out the various agreements. Thank you for your help.

Expert:  bigduckontax replied 3 years ago.
Thank you for your excellent support.

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