Problems as a Company Director - HELP!

[sja979]

Hi,

'm very new to this and am really really hoping someone can help or atleast point me in the right direction.

My husband went in to partnership in a Limited Company with 3 other directors, one of the directors told him that the other two were his friends and they were just going to be helping out at the beginning and once they had started making a profit they would return them there money and they would leave the company, this has now been revealed as untrue and that apparantly was not said, although he still wont admit it but the other two have.

My husband only went into this with this in mind as (like many others) he does not want to be working very hard to earn money for someone else, he and one partner actually do all the work and get paid a monthly wage where as the other two just have dividends when they are taken.

Do dividends have to be shared equally to all company directors?

My husband now wants to be bought out but I believe they are just going to fob him off and he will not get exactly what he is entitled to, the only problem is we do not know exactly what he would be entitled to, it is a Marquee Hire Company with jobs already booked for throughout the year and their stock all paid for.

Could someone please advise maybe how this would be shared equally or would he be able to do anything because of the lies at the beginning of starting the business?

There is a Company accountant who actually works for the other two directors and has already said he would favour them, he is supposed to be giving an evaluation of the company (bit worrying tho).

I feel we are going to be ripped off for all his hard work and really would appreciate any help anyone can give.

Many thanks for your time in reading this.

[stratigen]

Originally Posted by sja979

Hi,

Do dividends have to be shared equally to all company directors?

My husband now wants to be bought out but I believe they are just going to fob him off and he will not get exactly what he is entitled to, the only problem is we do not know exactly what he would be entitled to.

In simple terms:

1. Dividends are distributed based upon an 'amount per individual share'. So, if your husband owns 10% of the shares, he should receive 10% of the dividends.

2. If he owns shares, and wishes to be 'bought out', then there should be a clause [relating to the trading and valuation of shares] in the "articles of association".

3. As a Director, he is entitled to see the "articles", which can/should then be provided to a Corporate Lawyer for interpretation/advice.

4. In a 'dispute', I would expect an "external auditors" to perform any 'shareholder valuation (and not the internal Accountant).

5. Get qualified legal advice.

Regards,

Steve

[bwglaw]

Your husband should obtain independent legal advice. I am happy to advise if he contacts us direct at the email address below. We will need to see a copy of the Memorandum and Articles of Association, any Director Service Contracts and Shareholders Agreement, if he has these in place.

Jonathan