Insolvency for shareholders

[john9999999999]

Can anybody give any advice on a shareholder of a limited company going through voluntary insolvency.
Shareholder has no say in the business and hasn't for 2 years.

 

[Lisa Thomas]

It's the Company Shareholders that ultimately place company into Liquidation.

What is the % of share ownership?

Are they refusing to consent to the Liquidation?

If they are controlling Shareholder and you can't get their consent to pass the Lqn resolutions (or transfer the shares to someone else that will) then your only option is to make an application to Court to place the Company into Liquidation.

Your IP should be able to explain this.

 

[john9999999999]

I am 25% shareholder.(not company director)
There are two other shareholders that are CD. The majority shareholder,51%and director is the lead person running the business and has filled for voluntary insolvency.
I have nothing to do with the business and no say at all. Just wondering if I will be liable for any debts, even though the business has clearly been neglected.

 

[Lisa Thomas]

You need a 75% majority to Liquidate.

The only main ways you can be held personally liable is if:

a) you have given any personal guarantees
b) you have received shareholder dividends at a time when the Company was insolvent
c) have been involved in any transactions with the Company, such as receiving assets.
d) have acted in any way that could constitute being a shadow director

 

[john9999999999]

OK thanks Lisa.

 

[Lisa Thomas]

If the Company is insolvent then I see no reason for you not to cooperate with signing the Liquidation forms.

If you don't want to physically attend the meeting you can just vote by proxy so won't be too inconvenient.

 

[john9999999999]

OK. That seems to be the way I am heading, I left the company because of the way it was heading, but remained as a shareholder with no say in running the business.
I do however act as a garanteur for some equipment leased by a finance company for the business, should I be concerned?
Should I also declare any monies put up front into the business and during my time as director.?

 

[Lisa Thomas]

If there is a shortfall on the HP equipment following any sale your PG will be called in.

I'm not sure what you mean by declare?

If you are a creditor of the Company the Directors should ensure you are listed as such in the Lqn and you will then receive a claim form from the Lqrs to submit.

You also have the power to vote on the choice of Liquidator as a creditor (academic if you have already approved as a shareholder) and the Liquidators fees.

If there is a dividend to unsecured creditors you will then get some money back, however this is rare in Liquidations.

 

[john9999999999]

PG?

I didn't really mean declare, you have explained it, submit on the claim form yes.
Thank you lisa

 

[Lisa Thomas]

sorry - personal guarantee.

 

[john9999999999]

Lisa.
Would things affect myself with insolvency as I am a garanteur for the lease of the business? But remember I have nothing to do with business.

 

[Bob]

As @Lisa Thomas has said you may be liable if you have personally guaranteed the finance agreement. The finance company will no doubt call upon you to settle any shortfall in the sums due under the lease agreement. The fact that you are no longer involved is irrelevant and wad something you should have clarified before you left the company. Sorry

 

[Lisa Thomas]

Yes I'm afraid your personal guarantee will be called in if there is a shortfall - you will need to negotiate with them regarding any settlement.

If it is a material sum and you have other personal debts that you cannot afford you might want to consider some personal insolvency options.