how to remove a shareholder?

by scrwm Tue Mar 05, 2024 4:42 pm

So, I started a JV with a chap, I registered a new company and assigned him shares. Things kept deteriorating on his end and I realised he's on some white powder he shoves up his nose. The goal was to develop some homes on a plot he arranged planning consent on.

I've taken him off as director but cant shut the company with him still as shareholder.

He owes me some money privately, which I have sent down the SD1 route as my aim is to make sure he can't be a director and do what he has done to me to anyone else.

Things is tho, this LTD company, how can I shut it down it hasnt even go a bank account yet. It lasted all of 2 weeks with him, I can't believe it. Well I can, and I have only myself to blame for not taking my own advise i give others!

Any ideas?

by **daveiron** Tue Mar 05, 2024 9:23 pm

A couple of links that may be of some use.

https://companieshouse.blog.gov.uk/2019/02/21/7-duties-of-a-company-director/
https://www.business-lawfirm.co.uk/blog/Shareholders-rights-and-shareholders-duties.aspx

Maybe worth winding up original company and create a new one ? Or open a new one and transfer assets to that & leave the original dormant ?

by scrwm Tue Mar 05, 2024 10:04 pm

The issue being that we both own 500 shares of the 1000 shares total.
The company has zero assets, zero dates.
Personally, I see, no risk and just unilaterally closing the company.
My Accountant, though says I could land in trouble doing that.
I generally don't think this guy has any money to fight anything legally.
I've had three separate people. Tell me they think he's on crack..
My plan is to issue the statute demand over this weekend, and then wait for outcome I can, within in a certain period of time apply to the official receivers to make bankrupt. If I am to prevent him being a director ever again, that would be a win.
Thanks, Daveiron those links are very useful.

by scrwm Tue Mar 05, 2024 10:11 pm

@daveiron your link to the standard articles and memorandum was very helpful. Thank you.

I have known for a long time that how shares are issued and paid for to substantiate a person. Shareholding is really vital to understand....

A lot of people don't know this or don't bother to learn...

When a company shares, it will print a share certificate or transfer of shares document which the new shareholder will sign, and the company will sign as the one issuing the shares.

That's all fine and good.
The certificate still needs to be printed and actually signed by the company.
That's the first part.

The second part that just about 100% of people, I know are ignorant of...

Is that whatever the shares are valued at the shareholder has to pay that amount of money into the company when he receives the share certificate, and if he doesn't the transaction is never considered complete that the shares were never transferred to him.

Isn't that a useful bit of information?

My case, the shareholder did sign for the shares and the company did sign for issuing the shares. However, the Muppet of a shareholder never paid his £500 for his 500 shares into the company bank account.

Therefore, the transaction is not complete, and the company still actually holds the value of his shares that were in the process of being issued to him.

Had he transferred £500 to the company bank account? Then he would've been a fully incorrectly substantiated shareholder and I would not have a snowball trance of removing him.

However, this being the case, I am just going to go ahead and shut the company down

by **daveiron** Wed Mar 06, 2024 12:03 am

Looks like you are on top of things, hope all goes well ,another lesson learned.

by scrwm Fri Mar 08, 2024 12:06 pm

thank @Daveiron

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