Remove director from non trading company?

[4leggedtrends]

Me, a friend and my partner set up a Limited company which still isnt trading as software is still being written. My friend, in the meantime has set up her own business and doesnt seem interested in ours - i have asked her to do various jobs and she either doesnt do them or gives the bare minimum - one of the jobs was to hand in a business plam which was weeks to come and just the bare minimum. My partner and I are each working 100 hours a week to get this venture started and we would like her now to not be part of this. The company is registered with companies house. She is a director and holds 30% shares. How can we legally remove her and her shareholding if she does not resign? Thanks

 

[KAC]

Do you have a Shareholder's Agreement or any other documented agreement between the parties?

 

[DWS]

You can try to buy her out, does not mean she has to accept the offer.
What does the shareholders agreement say?
Did you involve accountants and solicitors in setting up the Company?

 

[4leggedtrends]

Do you have a Shareholder's Agreement or any other documented agreement between the parties?

unfortunately we dont

 

[4leggedtrends]

You can try to buy her out, does not mean she has to accept the offer.
What does the shareholders agreement say?
Did you involve accountants and solicitors in setting up the Company?

We dont have a sharehlders agreement but we have an accountant to deal with tax returns etc

 

[KAC]

This will explain how to remove the director. Getting the shares back is not so easy. Have you spoken to them about their voluntarily transferring the shares?

 

[4leggedtrends]

I havent spoken to her about this as I want to have facts first. The company was set up with £1 and shares were 35%, 30% and 30%. Can I offer her 30 pence? Sounds silly but the company is not trading yet so no money to give her?

 

[4leggedtrends]

I havent spoken to her about this as I want to have facts first. The company was set up with £1 and shares were 35%, 35% and 30%. Can I offer her 35 pence? Sounds silly but the company is not trading yet so no money to give her?

 

[DWS]

It does not matter what you offer her, it is what she will accept, if she feels the shares will be worth a lot more in the future then why shouldn't she hold on to them?
You say you have an accountant, what are their views on this, seeing as they have more knowledge of your Company and presumably were involved in the Company set up?

 

[Chris Ashdown]

May be simpler to have the two of you resign and start again

Establish who owns the work done so far as it started in the company or prior and how was it transferred to the company if it ever was. if it as transferred then i guess the present company owns it

Realistically i doubt either party would spend the money to take legal action against the others for little or nothing to gain

 

[KAC]

Much depends on who owns the intellectual property rights to the work carried out by you and your partner and the value of it
As @Chris Ashdown said, you could just resign and start again but you do need to be sure who owns the rights and whether your friend is litigious
Good luck

 

[sharabela]

Me, a friend and my partner set up a Limited company which still isnt trading as software is still being written. My friend, in the meantime has set up her own business and doesnt seem interested in ours - i have asked her to do various jobs and she either doesnt do them or gives the bare minimum - one of the jobs was to hand in a business plam which was weeks to come and just the bare minimum. My partner and I are each working 100 hours a week to get this venture started and we would like her now to not be part of this. The company is registered with companies house. She is a director and holds 30% shares. How can we legally remove her and her shareholding if she does not resign? Thanks

If she does not resign, you may ask her to get things done mutually. If she does not agree, consult with your solicitor. Since she does not contribute, things are to be different with her. She does not deserve same return as much as you guys do.

 

[Elliot Green]

Me, a friend and my partner set up a Limited company which still isnt trading as software is still being written. My friend, in the meantime has set up her own business and doesnt seem interested in ours - i have asked her to do various jobs and she either doesnt do them or gives the bare minimum - one of the jobs was to hand in a business plam which was weeks to come and just the bare minimum. My partner and I are each working 100 hours a week to get this venture started and we would like her now to not be part of this. The company is registered with companies house. She is a director and holds 30% shares. How can we legally remove her and her shareholding if she does not resign? Thanks

Is her new business doing the same thing as yours? If so, there could be all sort of conflict issues here.

 

[4leggedtrends]

Is her new business doing the same thing as yours? If so, there could be all sort of conflict issues here.

No, her new venture is completely different and shes doing very well with it