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Buachaill, Barrister
Category: Law
Satisfied Customers: 10978
Experience:  Barrister 17 years experience
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In a private limited company where shareholders are leaseholders,

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In a private limited company where shareholders are leaseholders, can a leaseholder/shareholder who owes a large proportion of service charges be put up as a director of the company at an Annual Meeting?
1. Unless the memorandum or the Articles of Association prohibit leaseholder/shareholders who owe money from becoming directors, there is no limitation in law on directors owing the company of which they are a director money. So long as the money owed is not a loan, then this is an unregulated area of the law. The director can safely be elected as a director even though he owes the (management) company a lot of money in service charges. If you are unhappy with this occurring, I would suggest you propose an amendment of the memorandum or Articles of Association so that people who owe large sums in service charges cannot be elected directors. Simply propose an amendment that all candidates who wish to become a director must be current and up to date in the payment of their service charges before they can be elected a director.
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