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SS Legal Advisor
SS Legal Advisor, Advocate
Category: Law
Satisfied Customers: 1046
Experience:  Senior Caseworker at DL Solicitors
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I have 10% shares in successful private limited company. MD

Customer Question

I have 10% shares in successful private limited company. MD has 80%, with other 10% shareholder holder working with him against me. He's trying to buy my shares for a fraction of what I believe they are worth. He has refused to give me information to get valuation. He is threatening to change Articles to cap any future sales at £30k, £20k lower than he's offering me at the moment. I believe they are worth, at the very least £100,000. Can he do this as it clearly us NOT "in the best interests of shareholders"?
JA: Because laws vary by location, can you tell me where the company is registered?
Customer: Runcorn, Cheshire
JA: Has anything been officially filed? If so, what?
Customer: In what regard?
JA: Is there anything else the Lawyer should know before I connect you? Rest assured that they'll be able to help you.
Customer: Thank you so much, I'm at my wit's end, this has been going on for a year. He knows I don't have much money to fight him after he made me redundant 3 yes ago.
Submitted: 7 days ago.
Category: Law
Expert:  SS Legal Advisor replied 7 days ago.
Hello,
I am an experienced legal advisor and I am happy to answer your question.It seems unfair that you would have to accept a lesser value for your shares.You would in fact be best placed at looking for an expert to value your shares. If a solicitor is dealing with the sale of the share they can instruct na expert for you.It is possible that such a change to the articles would be a breach.If there is a breach of director duties it is usually the company itself which takes action. In some instances, one or more shareholders can make a claim against a director if they have suffered personal financial loss or damage, or they believe that other director  may prevent a claim being made by the company.If you have follow up questions, I am happy to answer.Kind regards
S
Customer: replied 7 days ago.
Thank you for your prompt reply. This dispute has been going on since Feb 2018, back and forth. The MD has been obstructive the whole way through. January this year my solicitor requested members accounts for past 4 yrs, complete with bal sheet and prof/loss accounts, Management accounts, forward forecasts and details of dividend payments (he has been paying himself huge amount (£650k+) for at least the past 2yrs. I have received £0. I did receive divs when I was employed at the company. He refused so we had to threaten him with court, and even then he only agreed to supply div payment info and past accounts. So I feel it's fruitless to go down the valuation of the shares route again.
I just need to know if he can cap any future sale before I make my decision. If he can, i have no option but to accept his low offer.
Thanks.
Expert:  SS Legal Advisor replied 7 days ago.
Technically, given his share majority and position he can have anything written into the articles that he wants to.That being said, it would likely be a breach of his fiduciary duty and it would be more than apparent that he has only done so as a negotiation tactic. It would be something that could be taken to court with merit but would be costly and have some risk.Kind regards
S
Customer: replied 7 days ago.
Thank you.
Expert:  SS Legal Advisor replied 7 days ago.
I hope that makes sense.
Customer: replied 7 days ago.
I just have another question. The company has an alphabet share structure, ranging from A - H. I hold all of the D class shares. When getting a change to the Articles approved, am I right in thinking that each share class must have at least 75% agreement in order for it to pass, or can the 75% votes needed come from one share group only, or even two as the other shareholder will undoubtedly go along with any changes.
Expert:  SS Legal Advisor replied 7 days ago.
Hello again,It would depend on the articles as they are now but most likely 75% of all the shares that have voting rights.Do bear in mind that some shares don't have voting rights but I would imagine you know your share rights.Kind regards
S
Customer: replied 7 days ago.
can the 75% needed come from one category only?
Expert:  SS Legal Advisor replied 4 days ago.
It should come from all the categories.