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TheLawLDN, Lawyer
Category: Law
Satisfied Customers: 387
Experience:  Expert
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We have 27% shares in a company, the company isn't trading

Customer Question

Hi, we have 27% shares in a company, the company isn't trading and we are wanting to sell the shares back to the director. He is stating that they are only worth £27 where as we have been told that they are worth 27% of whatever is in the bank. Can you clarify this please
JA: Where are you? It matters because laws vary by location.
Customer: uk England
JA: What steps have you taken so far?
Customer: We have used a solicitor but we ran out of money, we just need clarification on how the shares are worked out so we can close this with the Director and move on.
JA: Is there anything else the Lawyer should know before I connect you? Rest assured that they'll be able to help you.
Customer: There is £57,000 in the bank the company owes a business rates bill of £19K and we are saying that we are owed 27% of what is left £10,260 we just need this clairfying
Submitted: 13 days ago.
Category: Law
Expert:  TheLawLDN replied 13 days ago.

Hello, I'm an adviser with JA and I will try to help you.

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Expert:  TheLawLDN replied 13 days ago.

Hello, I will try to assist.

Customer: replied 13 days ago.
Expert:  TheLawLDN replied 13 days ago.

Hello, I don't know how many shares were issued by this company, but I guess that £27 is the nominal value of the shares.

The nominal value of the shares is also known as "face value" and is the value assigned to the shares when they are issued.

Expert:  TheLawLDN replied 13 days ago.

The actual value of the shares can of course be different, as it may reflect the "value" of the company, which means that, no matter the nominal value of the share is, let's say, £1, the share may be worth more than that (the difference to be paid to buy that share is called "share premium").

Customer: replied 13 days ago.
We have been told that they are worth 27% of the value left after any liabilities have been paid is this not right?
Customer: replied 13 days ago.
the company hasn’t traded the balance sheet would say £57k as this is what is in the bank minus the liability of £20k leaves £37k then it would be 27% of the £37k is what we have been told. I just need this clarifying
Expert:  TheLawLDN replied 13 days ago.

As the company has not been trading, where does the money in the bank come from?

Customer: replied 13 days ago.
The sale of the business we had, and covid grants. So we had a business under this company (umbrella)
Expert:  TheLawLDN replied 13 days ago.

And what about tax

Customer: replied 13 days ago.
The accounts haven’t been done for last year yet that we know of
Expert:  TheLawLDN replied 13 days ago.

That does not mean there is no tax to pay.

Expert:  TheLawLDN replied 13 days ago.

Did you ask your accountant for an assessment of the value of the shares you own?

Customer: replied 13 days ago.
Understand that just want clarification on that is how the shares are worked out. The director is being shady he has withdrew all the money from the bank account he has changed accountants and all we are trying to do is leave the company and get what we are owed
Expert:  TheLawLDN replied 13 days ago.

I can't tell you what your shares are worth.

The calculation you made is way from accurate.

An assessment must be made by an accountant after examination of the books and accounts, which must be up to date.

Then, of course, if you may find an agreement with the other shareholder it's ok, but it doesn't seem you are on the same path.

Customer: replied 13 days ago.
Ok thanks for your help
Expert:  TheLawLDN replied 13 days ago.

You are welcome.

I hope this information is helpful and I wish you the best.

Please do not hesitate to contact JA again if you need help and you may ask to speak with me directly if you wish ("For TheLawLDN only").

I would appreciate it if you could provide a positive rating, if you wish so of course.

Thank you very much.