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Nicola-mod
Nicola-mod, Moderator
Category: Law
Satisfied Customers: 27
Experience:  Moderator
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A group of 29 local residents bought a strip of land behind

Customer Question

hi, A group of 29 local residents bought a strip of land behind their houses that abut the sea, each shareholder no matter how much money they contributed to fund ,received 1 share. a company was set up to administer the land , and at the outset every contributor knew that they would never own the land but the company would maintain it as is , " sand dunes" for the benefit of the local community. it was voted through at a meeting ,although not everyone was a registered shareholder at that time , 26 -0 with 3 abstentions that we would form a CIC. Some of the directors are now trying to pursue a course of action where the land would be given away to the shareholders, but there is no way that there would be any fair way to do this , as every shareholder has an equal right to 1/29 of the land. Can they get away with this?
Submitted: 4 months ago.
Category: Law
Customer: replied 4 months ago.
It might be of interest to note that two of the directors , dependant on how they distribute the land , ie, directly behind their house , would benefit the most.
Expert:  F E Smith replied 4 months ago.

Hello for clarification - what is the reason for this decision and who are the directors?

Customer: replied 4 months ago.
extra info there are 42 houses that back onto the land , so 13 did not contribute, we paid £125, 000 for the land at auction, 16 700 sqr metres is the plot size , but 5 houses back onto a plot that stretches to the sea that is 7000 sqr metres , this is the area where 2 of the directors own.
Expert:  F E Smith replied 4 months ago.

Let me get this correct.

The land is owned by a limited company and the directors who would benefit the most are proposing that the land is split up and divided and given to the share holders and that each shareholder will own a little plot? Is that it?

Customer: replied 4 months ago.
the 5 directors are shareholders , yes they will own a plot , is it easier to talk on trhe phone but i would need answers clarified in text?***********
Customer: replied 4 months ago.
ok carry on in text for mom , i believe there is a conflict of interest going on , and each shareholder has an equal right to 1/29 of ant company asset being size or value of land. but when the money was raised and everyone agreed to there was absoultly no mention by anyone of giving away the land, The original 2 fundraisers are fighting against the 3 additional directors voted onto the board , to stay true to nthe original concept, when the 3 additional directors were voted on they made no mention of there intention are now trying to push this idea through with a majority vote
Customer: replied 4 months ago.
There appears to be no obvious reason for this , can company look after land long term etc , but to me it is quite obvious!!!
Expert:  F E Smith replied 4 months ago.

Your question is to whether there is any reason why this limited company should not continue to own the land for ever, I can’t think of one.

There is clearly a conflict-of-interest here and this is a substantial property transaction.

Get if the directors are going to drive a coach and horses through the requirements of the Companies Act, then the shareholders need to make steps to remove them.

Customer: replied 4 months ago.
the CIC was voted on , but they have stalled the implementation, so the CIC has an asset lock and will protect the land for the community so that would be the best course of action for the company, and we seek shareholders meeting to remove dirtectors?
Customer: replied 4 months ago.
the referance to the companies act is about giving away the only company asset?
Expert:  F E Smith replied 4 months ago.

I am not a Community Interest Company expert and therefore I think I would be better opting out of this for someone else to deal. The thread is now open to all experts. Kind regards

Customer: replied 4 months ago.
is someone looking at this ? thanks
Expert:  Nicola-mod replied 4 months ago.
Hello,
It seems the professional has left this conversation. This happens occasionally, and it's usually because the professional thinks that someone else might be a better match for your question. I've been working hard to find a new professional to assist you with your question, but sometimes finding the right professional can take a little longer than expected.
I wonder whether you're OK with continuing to wait for an answer. If you are, please let me know and I will continue my search. If not, feel free to let me know and I will cancel this question for you.
Thank you!
Nicola