Looking to exit

Discussion in 'Legal' started by Merko, Mar 25, 2017.

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  1. Merko

    Merko UKBF Newcomer Free Member

    8 0
    Hello,

    looking for some advice. I am one of two directors for a ltd company, i am currently on maternity leave and due back very soon. It was agreed before mat leave that i would be kept up to date with the company and be involved in decision making during leave as quite rightly i have a legal responsibility. However the reality has been that there has been a breakdown of relationship just before my leave began with my business partner (who is the MD) which has lead to me being denied access to my company emails, mangement accounts, files etc due to servers and passwords being changed and with-held from me.

    I currently only have access to the company bank account. I am a person gurantor on the companys 15k overdraft. The other director is not engaging with me when i have asked for information.

    I would like to resign as a director. However i am also a minority shareholder. There is no shareholders agreement. I would like to retain my shares.

    There is also no employment contract. We set up as friends.

    The company owes me 10k, which is currently being paid back.

    I would like to withdraw from the personal guarantee as well. The company is not using the overdraft but looks like it will have to in the next couple of weeks. I am not happy with the spending on the account.

    Any advice on how i should proceed?
     
    Posted: Mar 25, 2017 By: Merko Member since: Mar 25, 2017
    #1
  2. kulture

    kulture UKBF Legend Staff Member

    7,852 2,138
    If the company is not using the overdraft go to the bank as soon as possible and request that the guarantee is removed. Get agreement in writing. It will naturally impact on the ability of the company to use an overdraft. In absence of any further information you can do little else.
     
    Posted: Mar 25, 2017 By: kulture Member since: Aug 11, 2007
    #2
  3. Rafael Mediator

    Rafael Mediator UKBF Contributor Free Member

    46 7
    The current situation sounds untenable for both yourself and the company. Have you considered offering to go to mediation with the MD to find a solution?
     
    Posted: Mar 27, 2017 By: Rafael Mediator Member since: Mar 14, 2017
    #3
  4. Merko

    Merko UKBF Newcomer Free Member

    8 0
    I dont think he will enter into mediation

    I have looked at the gurantor contract and it says i need to give a months notice in writing to withdraw my guarantee from the overdraft. So i will send that recorded delivery tomorrow to the bank.

    I will also be resigning tomorrow morning.
    I have a laptop owned by the company, when will this have to be returned?
     
    Posted: Mar 27, 2017 By: Merko Member since: Mar 25, 2017
    #4
  5. Mark T Jones

    Mark T Jones UKBF Ace Full Member

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    Just a thought. Withdrawing your guarantee could create a situation where the company cannot trade thereby invoking the guarantee.

    As always, the sensible course of action has n these things is to communicate - not always possible I know. But highly destructive not to
     
    Posted: Mar 30, 2017 By: Mark T Jones Member since: Nov 4, 2015
    #5
  6. Paul Norman

    Paul Norman UKBF Ace Free Member

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    The personal guarantee, here is a bigger challenge than most people realise.

    The bank are not obliged, just because you resign, to release you from that. In fact, their most likely response will be to immediately call in the overdraft. From you. That will result in protracted, and unpleasant, negotiations with the bank.

    There is no shareholders agreement in place - I do not know if there is any contract of employment as a director. Essentially, you can resign, though, and that would end your employment as director. It would leave your shareholding intact. And you would still be a guarantor of the overdraft.

    As stated above, you need to sit down and negotiate an exit. As you are currently a director, your first priority is to the business, so you cannot hold guns to heads.

    The situation you are in, is all too frequent in small to medium businesses where corporate governance is poorly understood. You are not the first, and wont be the last, to potentially lose a lot of money.

    But seriously, negotiation is your best option. Confrontation will not end well.
     
    Posted: Mar 31, 2017 By: Paul Norman Member since: Apr 8, 2010
    #6
  7. Rafael Mediator

    Rafael Mediator UKBF Contributor Free Member

    46 7
    Paul, I agree with you. These situations are always messy, and confrontation never gets anywhere. I wonder why the other side will refuse to mediate? It is in their best interests to resolve this situation quickly as well!
     
    Posted: Mar 31, 2017 By: Rafael Mediator Member since: Mar 14, 2017
    #7
  8. Paul Norman

    Paul Norman UKBF Ace Free Member

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    Bluntly, Rafael, it is because the people involved do not have sufficient knowledge, and/or are being poorly advised.

    It is in everyones best interest to solve the problem, but everyone is starting off from a position of not realising the legal actualities of the situation, or the potential cost of not sorting it well.
     
    Posted: Mar 31, 2017 By: Paul Norman Member since: Apr 8, 2010
    #8
  9. Lawyer

    Lawyer UKBF Regular Free Member

    157 27
    And sometimes resigning just means you do not have access in law to the information directors but not shareholders can access so it is not always best to resign immediately.
     
    Posted: Mar 31, 2017 By: Lawyer Member since: Feb 28, 2008
    #9
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