Can I be a Managing Director of 2 Ltd Companies

Discussion in 'General Business Forum' started by spaced1981, Sep 27, 2012.

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  1. spaced1981

    spaced1981 UKBF Newcomer

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    Good Morning to All.
    I am in a position where I am one of two Managing Directors (each with 50% share) in our Ltd company we set up some time ago.

    I am looking to get out of this and setup a new (rival) business where I am the sole owner from the outset.

    Would it be illegal or problematic if I registered as the MD of my new company, so I can get the ball rolling, while things are being sorted out with company #1.
    I don't want to go ahead and them find I have given my partner an easy way to kick me off first due to some "conflict of interests"?

    Any advice is appreciated.
     
    Posted: Sep 27, 2012 By: spaced1981 Member since: Sep 26, 2012
    #1
  2. Moneyman

    Moneyman UKBF Legend

    2,730 787
    Well it sounds like you are going to have a major conflict of interests.
    You can start the company no problem as there is no real position of MD, just directors in general.
    However if you are going to poach customers or whatever i strongly advise you to talk to your partner. People go their seperate ways all the time. If you halve the work between the two companies and then compete later. you could remain friends. if not you could end up with an enemy with both of you slagging each other off which will make everyone a loser. You would also be liable for any customers that switched before you gave up you current job.
     
    Posted: Sep 27, 2012 By: Moneyman Member since: May 3, 2008
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  3. spaced1981

    spaced1981 UKBF Newcomer

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    Thanks that is what I thought. I didn't really consider working together but will rethink the options.

    I may get my wife to be the MD of new company to begin with as she has no role in company #1. Would that be OK?

    Also am I allowed to own the shares in new company if I do this?
     
    Posted: Sep 27, 2012 By: spaced1981 Member since: Sep 26, 2012
    #3
  4. businessfunding

    businessfunding Guest

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    As a company director you have a statutory duty to act in it's best interests, which is unlikely to inlude setting up in competition.

    As on ald-fashioned suggestion, hy don't you sit down with the co-owner and thrash this out, possibly aiming to split the business so that you each get something?
     
    Posted: Sep 27, 2012 By: businessfunding Member since: Jan 1, 1970
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  5. chuckles

    chuckles UKBF Legend

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    It's not a case of being legal to be a director of two companies its a case of breach of duty oan non competition rules with your current set up.
    Even if you make your wife MD, there could still be a conflict of interest.
    As suggested above, try sitting down and talking to your partner about any issues and why you are not happy with the current set-up.
     
    Posted: Sep 27, 2012 By: chuckles Member since: Jun 14, 2012
    #5
  6. brianp22

    brianp22 UKBF Newcomer

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    I think there is no problem at all to be Director of more than one company.. but as you have said you are starting a rival company of your present company is wrong.. you can start a company but you cant use any resources, clients and any other companies personal details to your new company that would be illegal on your part.
     
    Posted: Sep 27, 2012 By: brianp22 Member since: Aug 9, 2012
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  7. 10032012

    10032012 UKBF Legend

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    why you setting up a rival business?
     
    Posted: Sep 27, 2012 By: 10032012 Member since: Mar 10, 2012
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  8. brianp22

    brianp22 UKBF Newcomer

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    Because he understood the business now. Now he don't want to share 50% profit with other guy, want whole 100% profit in his own pocket :|. This will surely backfire him. All the best for your business but Businesses are Team work.
     
    Posted: Dec 4, 2012 By: brianp22 Member since: Aug 9, 2012
    #8
  9. SetupaCompany

    SetupaCompany UKBF Regular

    306 56
    I think you have to look at things ethically as well as legally as it sounds like you are out to shaft your partner in business number 1.

    I would echo the responses of others, sit down and try and come to a mutually acceptable solution, doing things underhand and intentionally trying to hide your intentions from the partner in business 1 will only end badly.
     
    Posted: Dec 4, 2012 By: SetupaCompany Member since: Sep 12, 2012
    #9
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