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Joshua
Joshua, Lawyer
Category: Law
Satisfied Customers: 29200
Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
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I'm a non-shareholding director in a limited company.. I

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I'm a non-shareholding director in a limited company.. I have requested to see accounts (that we've apparently paid for) but have been denied access to date, I have not been told of any company decisions that have been made re financials, Keep being told I'll be paid "dividends" - which as a non shareholding director I'm not entitled to! All monies coming into company are from my endeavours... As I negotiated a monthly retainer fee from a contact of mine! I have been given a print out generated through SAGE and told that these are the accounts. Which of course are totally ambiguous without a bank statement to compare with... Does the main director have the legal right to withhold these details from me. I did ask for a Board Meeting to clarify my responsibilities, financials etc when I was made a director... But, a BM never happened... Do I have any rights against this behaviour? Kind regards Vic
JA: Have you discussed this with a manager or HR? Or with a lawyer?
Customer: No... It's a small company. x2 other directors.. A husband and wife
JA: What is your employment status? Are you an employee, freelancer, consultant or contractor? Do you belong to a union?
Customer: I'm on a minimum salary with supposedly "dividends". I receive a payslip
JA: Is there anything else the Lawyer should know before I connect you? Rest assured that they'll be able to help you.
Customer: I've asked the customer (my contact) to hold the last payment until the partner pays what he promised he'd pay. Basically, he has failed to pay monies he promised since 10th May.. He's kept moving the goalpost and refused to show me the end of year accounts!

Hello and thank you for your question. My name is ***** ***** I will be very pleased to assist you. I'm a practising lawyer in England with over 15 years’ experience. Please be aware that although I will endeavour to reply to you promptly, I am also in full time private practice and so I may not be available to respond immediately and it may also take me a few minutes to prepare a reply. The site will notify you as soon as I respond. I look forward to working with you to answer your question fully.

I am very sorry to read of the above and I imagine what a difficult position it must be. I will certainly try to clarify your options.

  1. Do you have a contract with the company to supply services please? I note that you mentioned that much if not all of the company's income is derived from your efforts?
  2. If so what are the other directors bringing to the table? Have they financed the company?
Customer: replied 8 days ago.
Hi Joshua... I understand you might be between clients. Not a problem... No, I don't have a contract! I did send an email with questions that I wanted to address at a Board Meeting. But they (husband & wife) poo poo'd that idea with the following remark "it's all about you and money"... Which I replied "Of course it is... I need to know my responsibilities as a company director" Basically, The husband (a friend of a friend) offered to reopen an old ltd company for me to use and put all the work I'd just negotiated through from an Int'l Advertising Agency that needed me to operate as a Ltd company. No, the other directors were incumbent with the company and have made ZERO financial contributions to date!

thank you. For context on my part, before we come onto the subject matter of your question which, with your permission, I will do the moment, I do not fully understand the benefit to you of your involvement with these individuals. Was your expectation that they would contribute to the company and they have not or otherwise, why have you involve yourself with them as opposed to for example simply starting your own company which she would fully control and take benefit from?

Customer: replied 8 days ago.
Good question... It was the quicker route to setting up on my own and he was a friend of a friend! I saw it as an opportunity to build a company that was complimentary to their existing company and business "Branded Packaging" - Package printing company. BP I would build "Branded Design" to offer all design, marketing and design to their incumbent client rostrum and build new business in the Packaging Design world!... However, The design work that came from my client, the advertising agency, was substantial... So, I concentrated on making that work. I was supposed to be a director in both company's... Which was the glue that kept me going! They were supposed to pass over their incumbent clients for me to offer the design service to compliment the printing aspect... The COVID didn't help matters, as we couldn't arrange face to face meetings.
Early November I was officially made a director and added to the Companies House records. End of November I requested a Board meeting of directors to discuss duties, responsibilities, Co pension, life insurance etc - all of which had been promised verbally to me ( my wife can vouch for this) and what I could expect financially eg expense credit card, car etc...
That was the last time I had any conversation with his wife! And come Jan 21' I was removed having access to the company dropbox (files and jobs were stored here), taken off two Whatsapp groups with the company... There was never a co credit card issued after my chasing for 4/5 months! always the bank was dragging their heels and he'll chase them!!! After much chasing I did receive some Mickey Mouse print off from SAGE that were supposed to represent the account situation... Even though it was showing we had paid £800 to an accountant in Feb/March! Needless to say I have never seen the official accounts! I officially resigned (by letter) from the company in May and finished my association as of June 1st 2021. I'm simply trying to get what was promised and owed to me... I hope this is making sense?

thank you. Somewhat curiously, there is no specific provision in the companies act 2006 to provide directors with a statutory right to information in respect of the company. It is possible that a director may have rights to such information within the company's articles but such provision would be unusual and I would not expect it to exist. However, section 388 of the companies act requires the company keeps accounting records for three years from the date they are made up and make such records available for inspection by company officers which of course includes directors. it is a criminal offence to fail to make such records available to company officers.

this is of course not the same thing as access directly to bank accounts but it does give you a right to access the company accounts for the above three year period.

As regards ***** ***** other information beyond company accounts, there is relatively limited law on the point. There is common law in the form of Dilato Holdings Pty Ltd v Learning Possibilities and others [2015] where it was held that a director should have access to all documents of the company rather than just accounting records providing the reason for access to those documents was for a proper purpose and the performance of the directors duties.

Accordingly, to the extent you have a right to such information as above, and it is not been provided, you could seek a court order under part 8 to require disclosure of such information:

https://www.gov.uk/government/publications/form-n208-claim-form-cpr-part-8

looking at the issue from a longer-term point of view, if you do not have a contract with the company in question is the performance of services, as I'm sure you have already considered yourself, I wonder whether there would be a purpose to consider whether you may be better off parting company with the current limited company and pursuing the business for a company you control in order to avoid such potential issues in the future.

Joshua and other Law Specialists are ready to help you

I hope the above answers all your questions. If there is anything else I can help with please reply back to me otherwise thank you very much for visiting JustAnswer and I hope we will see you again in the future.