Changing Share allocation without consultation

[Goblin]

Hi,

a previous business partner has changed the share allocation in the business from what it was originally without any consultation.
In the documents of incorporation, we had the following split:
Director 1: 75 Ordinary Shares
Director 2: 25 Ordinary Shares

After falling out with each other, we are trying to resolve the situation however things are not going very smoothly
On a recent AR01 filling to Companies House, I could see that the shareholding split is now as follows:
Director 1: 100 OTHER shares
Director 2: 0 ORDINARY shares / 25 shares transferred as at <earlier date>

Now, I know I have never signed any kind of share transfer form nor anything else that may have been construed as me transferring my shares to anybody.

So, the question is: can he just do that unilaterally? and if he can't, what is the possible recourse?

Any help would be greatly appreciated,

Best regards,

 

[akirk]

unless there is paperwork to back it up - then no that can't be done...
contact companies house.

Alasdair

 

[Hombre]

Yes. Technical Infringement Department are the chappies you want.

 

[Goblin]

That's great - thank you for the answers, they were what I was hoping to hear

Cheers,
G

 

[Chris_D]

Just a quick pointer....

It may be possible for him to have transferred your shares without your authority.... it depends what it says in your mem & arts and / or shareholder agreement.

Notwithstanding this, (again check your articles) it may be possible for him holding 75% that he could issue new share capital and dilute your shareholding to nil value..... it’s best get legal advice for certainty.

Either way you have various rights as a shareholder and you could always threaten or pursue a derivative action – see sections 260 – 264 of the Companies Act 2006...


As always, it would be expensive to walk the legal route

 

[Free Lance]

Companies House can only get you so far. They have a discretion to remove some forms filed wrongly (such as director resignations) and will write to the parties concerned. If either party objects then they will only act on a court order.

Come what may, they have no discretion to remove an annual return that has been wrongly filed without a court order (although they can accept amending ARs).

You're focussing on the wrong thing. Companies House is just the public record (which has done what it should and alerted you to the changes). What matters is what is written in the statutory books of the company. Failing very sophisticated articles or shareholders agreement giving the other director a right to take your shares away (which I'm assuming you do not have) then the shares are yours to keep forever and a day. They are your personal property.

You need to (a) get yourself written back up as a shareholder of the company in the statutory books, (b) find out whether any dividends have been declared in your absence and (c) negotiate a way forward from there: if you've gone your separate ways then the best result might be for the other shareholder to buy your shares.

Good luck