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Buachaill, Barrister
Category: Law
Satisfied Customers: 10955
Experience:  Barrister 17 years experience
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I have a 49% shareholding in a small company. 51% is owned

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I have a 49% shareholding in a small company. 51% is owned by my estranged husband. The company has been in debt (to his family who lent the money) for a few years. He is desperate to get me off the board and is being really nasty about it.
I looked at the accounts which seem very dodgy. For example he is paying his divorce lawyer out of the company account and all his rent for his residential property also goes out of his business account. He never gives me a dividend although paid himself one of £17k a year ago. Can I do anything? I've been bringing up our four children so haven't been involved up until now. I also noticed a payment going in of £45k but he tells the taxman he only earns £8k per year. Do I have any rights? What can I do? Any advice hugely appreciated.
1. Here you should get yourself a good company law solicitor and seek to tee up the situation for a section 997 unfair prejudice buyout situation. Essentially, this would result in your 49% shareholding being bought out by your husband. However, be aware that this is only an option if the company is worth money and it is worthwhile being bought out. It would involve at the outset, seeking an account of all the dealings of the company. Then it would involve initiating proceedings seeking to allege oppression on you as a minority of the company's shareholdings. The ultimate end would be a buyout situation whereby your husband bought you out of your shareholding.
2. You should also get a copy of the latest accounts from Companies House and examine them to see what is being declared. This will give you a guide to the valuation of the company. Get a forensic accountant to examine the accounts and see what is missing. You already have evidence of irregular payments. However, the key idea is to get yourself some money from it all.
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Customer: replied 2 years ago.
Thank you for your answers. Unfortunately the company isn't worth anything and has been in debt for a few years. However he is literally DESPERATE to get me off. I wonder if he could be planning on putting a considerable amount of money in it soon and I wondered - could he want to utilize the previous year’s taxable losses the company has sustained? If so it would be worth me staying on. Also the way he is putting personal rent and divorce costs through the company account - is this legal?
4. Yes, your husband could write off profits from this year and the next against the past year's losses. This would be an obvious approach if the company is trading profitably this coming year. Secondly, personal rent and divorce costs are not lawful company expenses and are not deductible for the purposes of Corporation Tax. I would imagine if he is short of money, then he is just getting the company to pay these. However, I can only guess. You would be in a better position to know.
Customer: replied 2 years ago.
thank you very much. your answers have been very helpful
5. You are welcome. Glad I could be of assistance.