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I am a 50% shareholder in a small ltd company. There is one

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I am a 50% shareholder in a small ltd company. There is one other 50% shareholder who is also the sole director. There is no shareholder agreement. The prior years company accounts show both a directors loan of £60,000 to the director and also a loan to me of the same amount.
This is wrong as I have never taken a loan and and I don't believe the director has either. The director has never asked for approval of a loan and I have never signed or discussed a loan to myself. I can only assume that the financial standing of the company is poor, hence the reporting of these two large loans to settle and balance the books, within this FCA regulated company we own.
I have tried to contact the director asking for the more recent accounts that have been sent to companies house following the prior ones I have seen. The beta companies house website only shows the basic accounts and therefore does not show the updated/ any, details of these loans.
Is the external accountant legally bound to provide these to me as a 50% shareholder. If not, I don't believe he will send them if I ask. I have only asked the director to date.
Can I go to the county court to ask for an order for him to produce these documents, without the requirement of any proceedings or heavy costs or litigation
Can I make an easy claim for the repayment of his loan easily, as this I know will wake him up as I know this loan never existed.
If I call an EGM to discuss this, can he decline a meeting. If he does, can I easily use the court system to get an order for a meeting to take place, again without having to form a claim for derivative action or other claim which would have to be used.
I am generally asking what i can do, to get this man to answer my questions and show the documents to me, without me having to put a larger legal case against him. I am hoping for an easy way forward here.

Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.

Please verify the position as to these loans. Your question says thay are by the company to shareholders. This can have horrendous tax consequences unless repaid within a very limited period. Do you actually mean loans by shareholders to the company, a very common occurrence. Requiesting a return of such a loan will wake the other party up and, in any event, if not repaid, could be grounds for an application to the Court to wind up the company to which there would be no defence.

The accounts filed at Companies Housewill invariably be an abbreviated version. As a shareholder though you are entitled to a full set of accounts annually.

I shall be away from my PC for a few hours today taking my wife to hospital, but rest assured I will attend to your query on my return.

Customer: replied 1 year ago.


I am aware that I am entitled to the accounts. As I said in my question, the accounts lodged with companies house only show some of the information. The two loans are not documented. I know they will be on the full accounts. I have asked the director for these but he is not responding to me. I was asking how I can order him to send these to me.

The two loans are were I fact listed as loans to 1. The director and 2. To me. They are loans from the company. They have been outstanding for 2 years and corporation tax has already been paid on them.

At this first stage, how can I go about getting the accounts? Is the accountant legally obliged to send them to me?

I know for a fact that they are fictitious.

Well, he would be ill advised not to acquies to the request. You could also put the cat amongst the pigeons by demanding an audit under s. 476, Companies Act, 2006. The Company would have to hold a General Meeting to appoint one. You could also raise a motion to require the company to hold Annual General Meetings. Any motion to dispense with these, probably ta***** ***** ago must be unanimous so a demand that they be reinstated would be impossible to resist. There is always the danger that the company might call in your loan which could cause embarrassment. All in all you are well advised to come to some amicable compromise with the other shareholder.

Finally you could apply to the Court for relief; an expensive exercise.

Customer: replied 1 year ago.

The fact remains that I never had a loan in the first place. I used to work at the company and collected dividends as he did. I am certain that he had to put loans on to the accounts to balance the books, as the FCA required the company to keep a level of liquidity which it didn't have, as he kept taking too much money out of the company.

As I was asking before, is the company accountant responsible for sending me a copy of the signed accounts do you know, as I don't seem to be getting any luck with the director.

The idea I have here is, which I believed will be a quick fix to getting his attention, would be to get hold of the accounts somehow that he has signed. I can then request the immediate repayment of his loan (which of course he cant deny is a directors loan, as he signed the accounts as a director). He in turn will call in my loan, but as this never existed and there is no paperwork, it cannot be proven.

Following the non payment of his loan, I can then put in a petition to wind up the company.

Can you see this working?

I would hope so; I have been company accountant to numerous companies and always distributed accounts to members once they have been signed off. If the accountant will not furnish you with a set of accounts you could report his antics to his professional institute if he has one. How can you demand the return of his loan? You are a mere shareholder not a director of the company. You have no authority to make any such demands. I have indicated to you relatively simple ways in which you can rock the boat. You cannot make a winding up petition, you say the loans are from the company to individuals. Were it the other way about that would be an entirely different kettle of fish.

Can you prove that this loan never existed?

Customer: replied 1 year ago.

Thank you very much for this information. This is very helpful. I will formally write to the director requesting a general meeting of shareholders. Can I assume that in my request for a meeting, that as a shareholder, I can ask questions at the meeting relating to why the company has not been paying a few of the now redundant insurance brokers the company employed, their commissions that they told me they were due to be paid? Or as a shareholder, am I limited to only being able to ask questions about the accounts? I am just wondering if the scope of my questioning can involve how the business is being run? Thank you once again.

In your position there is effectively no limit to the questions regarding the operations of the company upon which you may pose. Whether you receive any meaningful reply is quite another matter. You might well be advised to engage a solicitor to assist you although the Articles may well preclude their presence. In the long term this may be a matter for police action, but they are usually loath to interfere unless there has been fraud.

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Customer: replied 1 year ago.

Understood and thank you

Thank you for your support.