How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Alex J. Your Own Question
Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3840
Experience:  Solicitors 2 years plus PQE
Type Your Law Question Here...
Alex J. is online now

My business partner and major shareholder in the business is

Customer Question

My business partner and major shareholder in the business is randomly withdrawing cash from the main business account, what course of legal action can I resort to?
Submitted: 2 years ago.
Category: Law
Expert:  Ben Jones replied 2 years ago.
Hello, have you challenged this person over their actions?
Customer: replied 2 years ago.
Yes, but to no effect. I have also tried to restrict access to the business account, we're both authorise signatories on the account, so he's able to remove any restrictions placed. We have year end accounts due in the couple of months and there will be several unaccountable discrepancies in the accounts.
Customer: replied 2 years ago.
(Posted by JustAnswer at customer's request) Hello. I would like to request the following Expert Service(s) from you: Live Phone Call. Let me know if you need more information, or send me the service offer(s) so we can proceed.
Expert:  Alex J. replied 2 years ago.
Hi, Thank you for your question and welcome. My name is ***** ***** my colleague has asked me to assist you with this. Do you have a shareholders agreement? Do you want to continue working with this person? Kind regards AJ
Customer: replied 2 years ago.
Hi Alex, thanks for picking this up, we don't have a shareholder agreement and no, the relationship is beyond repair, really need advise on the best way out, legally and equitable, with minimal reputational damage to myself, thanks
Expert:  Alex J. replied 2 years ago.
Hi Thank you. My apologies for the delay I have had no internet access this weekend. Would the pother shareholder be prepared to buy you out? Before going to court, you could suggest appointing an independent valuer to value the company and agree a price for him to buy you out
Customer: replied 2 years ago.
The other shareholder has offered what appears to be a random price for his share holdings, which I am not prepared to pay. Although, the first year end returns are due at the end of Feb, how else can we proceed with an independent valuation that both sides can settle on?
Expert:  Alex J. replied 2 years ago.
Hi, Thank you. You would have to mutually agree the concept of appointing and independent valuer. The alternative he is potentially in breach of various obligations contained in S.172-179 of the Companies Act 2006 - acting in conflict of interest, failing to act in the best interests of the company. You would have to apply to court and obtain either an order that your partnership has failed and the company is an asset of that partnership and should be dissolved or you apply to have the director remedy the offences he committed as a derivative action of the company under S.260 of the Companies Act 2006. Does he have any money to pay any court order against him and is the company actually solvent?
Customer: replied 2 years ago.
The company is solvent right now, but the dispute is beginning to have an impact on future business, so future viability is not too good! I will be looking to raise the court order, but would like to understand the exact process and likely impact on debtors, reputational impact, i.e implications to other directorships that I currently hold, thanks.
Expert:  Alex J. replied 2 years ago.
Hi, Thank you. If a Court order forces the company to dissolve and the assets are distributed you could take the assets and start again, but the risk is you could lose any existing goodwill and the company and your customers would not have to go with you.
If your partner was forced to sell his shares to you then the company would remain as is.
Has reputation damage not already been done? Would it not be preferable to just start again in a clean company that has not been blighted by a director taking cash from it?
Kind regards