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Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3843
Experience:  Solicitors 2 years plus PQE
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Recently myself and two others set up a new limited

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Recently myself and two others set up a new limited company registered in scotland, I was added to the company as a director and shareholder about 2 months after they registered the company.
The company then took out a £24,000 loan from the bank to get started, all three of us were guarantors for the loan although the loan is repaid by the actual company.
Now, due to not being able to afford financial input in to the company and personal circumstances the other two Directors removed me as a Director and shareholder - I found this out from a third party several days after the event - is that allowed without a board meeting?
Since they have removed me I have received quite rude and insulting emails from them demanding that I give them £8000 as repayment of the loan, of course the loan money has been spent on company assets that the remaining two directors own 50% of each as I no longer have a share of the company since they removed me.
I spoke with business relations at the Royal Bank of Scotland who informed me that as the other two Directors removed me as a Director and shareholder I no longer have any liability towards the loan and all liability now lies with the remaining two Directors.
I have also spoken with a top flight accountant who has said the same as the bank, I just now need to hear a legal opinion on this.
Between the three Directors when the company started, no contract or legal agreement has ever been signed as there is not one, no lease on rented premises has been signed either as the landlord has never produced a lease, no other legal documentation has ever been signed between the three (now two) Directors.
At the bank on signing the guarantor bit for the loan it turned out the one I signed was in the name of one of the other Directors - I never signed another after that so they have incorrect guarantor paper work from me.
I look forward to hearing a legal opinion.
Thank you for your question and welcome.
My name is ***** ***** I will assist you.
The first point I would note is based on what you have described the advice you have been given is correct. You cannot be liable for another persons debts (in this case a company is a legal person) without accepting liability in writing. The instrument used for this (the guarantee) has not been executed in your name. The bank therefore cannot call on you under the guarantee - it is flawed. As the bank clearly hold a similar opinion - for piece of mind I would ask the bank to confirm in writing that you have never signed an effective guarantee for the company debts to RBS.
In relation to the shares - did you sign a stock transfer form?
Kind regards
Customer: replied 2 years ago.
Hi Alex,I have never signed a stock transfer form - what is it exactly?RegardsJon
Thank you.
They cannot take your shares off you without your consent unless you gave them a contractual right to do so in a shareholders agreement for example?
In order to transfer your shares to another party you have to consent to it - you would have signed a stock transfer form CON40G - I think you would know if you signed one.
Did you ever have any share certificates?
Kind regards
Customer: replied 2 years ago.
Hi Alex,I never received any share certificates and nor did I sign anything in relation to shares although apparently I had 1 equal share.
After looking at their company returns there are only two share holders.Was it legal for them to remove me as a Director in the way they did?In fact have they broken any laws in the way they have done this?RegardsJon
Thank you.
Unfortunately it sounds like they never actually gave you a shareholding.
Legally they could have removed you as a director by voting 2-1 against you for your removal or passing a shareholder resolution - which would only require a 51% majority.
If you had an employment contract or had were paid a salary, you may have grounds to make an employment claim.
Kind regards
Customer: replied 2 years ago.
Hi Alex,Thanks for your reply, I think this concludes our discussion.Kind RegardsJon
No problem.
If I can assist any further please do not hesitate to contact me.
Any feedback is gratefully received.
Kind regards
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