Shareholders divorcing

[Ebee67]

Our small company has two shareholders that are also employees. They each hold have 25% of shares. They are divorcing. They were both paid as employees but one has effectively left but has not yet resigned. She can no longer fulfil her role as admin support to her partner.

Can the company make her redundant? She would of course get Statutory Redundancy Pay.

Working out the share value will be another matter!

 

[Newchodge]

Our small company has two shareholders that are also employees. They each hold have 25% of shares. They are divorcing. They were both paid as employees but one has effectively left but has not yet resigned. She can no longer fulfil her role as admin support to her partner.

Can the company make her redundant? She would of course get Statutory Redundancy Pay.

Working out the share value will be another matter!

She is not redundant if there is still a need for admin support for her partner. You would be better having a 'protected conversation' with her, agree a settlement package for her to leave and get a settlement agreement signed so she cannot take an ET.

Why do you need to work out the share value?

 

[fisicx]

She can no longer fulfil her role as admin support to her partner.

That’s her decision. She can do her job or resign. No need for redundancy.

She can keep the shares as well as the allocation is nothing to do with employment.

 

[Newchodge]

That’s her decision. She can do her job or resign. No need for redundancy.

She can keep the shares as well as the allocation is nothing to do with employment.

Being unable to do her job may be as much the decision of the partner as hers.

 

[fisicx]

Being unable to do her job may be as much the decision of the partner as hers.

Depends on how amicable the divorce. I’ve worked with people who couldn’t stand each other but still managed to remain professional.

 

[WaveJumper]

The sort of situation I believe where people need to be grown up and have proper grown up conversations. As others have mentioned they may well still be able to work together I also know of situations where this has happened and in fact they seem to have got on better when they parted than they did before.

If they are up for a nice little cash settlement fine they may need this as seed money to move on in their life but ultimately there is no reason for them to part with the shares.

 

[DontAsk]

Depends on how amicable the divorce. I’ve worked with people who couldn’t stand each other but still managed to remain professional.

I've worked with people I couldn't stand, but named to remain professional.

 

[Ebee67]

I

She is not redundant if there is still a need for admin support for her partner. You would be better having a 'protected conversation' with her, agree a settlement package for her to leave and get a settlement agreement signed so she cannot take an ET.

Why do you need to work out the share value?

I don’t need to deal with the share value but someone will unless she decides to keep them.

Regarding employment it was perhaps more of a convenience that she was an employee rather than fulfilling a necessary role. It predates me so I don’t know the background.

 

[Newchodge]

I

I don’t need to deal with the share value but someone will unless she decides to keep them.

Regarding employment it was perhaps more of a convenience that she was an employee rather than fulfilling a necessary role. It predates me so I don’t know the background.

It would still be best to reach an agreement and have it formally signed off, to avoid a possible tribunal claim.

The shareholding could, if everyone agrees, be part of the employment settlement agreement, Uless there is a shareholder's agreement stating that she must give up the shares, she is fully entitled to keep them and receive dividends. That may be awkward for the other shareholders.

 

[Ebee67]

It would still be best to reach an agreement and have it formally signed off, to avoid a possible tribunal claim.

The shareholding could, if everyone agrees, be part of the employment settlement agreement, Uless there is a shareholder's agreement stating that she must give up the shares, she is fully entitled to keep them and receive dividends. That may be awkward for the other shareholders.

I think it’s best to keep the employment separate from the shareholding so I’ll see if we can come to an agreement.

 

[Ryan Paul]

Is the 'Admin' role on paper for tax purposes?

Are both persons wanting to retain their share?

They really need to consult a lawyer.

Amicably, other s/hs could buy her out.
If there's bitterness, I've known lawyers offering advice of closing the company and repropening under a slightly different name and cutting someone out.

 

[Ebee67]

Probably yes for tax purposes.
Not sure if they both want to keep shares, certainly other half does.
Other shareholders not interested in buying.

 

[WaveJumper]

Again before escalating this into the realms of a bottomless pit of lawyering up. Have you or anyone else actually sat down with those involved and had a sensible "chat" over a cup of coffee. Are you a shareholder

 

[Ebee67]

Yes we’ve had a chat and it’s pretty amicable.

 

[fisicx]

In which case if they can no longer work for you they can resign. It's not complicated. Leave the shares exactly as they are.