With holding dividends

[spaniel12]

I`m a 20 % shareholder in the family business last September I had to leave due to ill health resulting from bulling from a member of staff and some family members who worked and hold shares in the company.

On leaving I was verbally gifted my company vehicle by my parents as to help me and my family due to not having a job or income.

The company made a profit in 2011 and dividends were paid to the other shareholders but not to me, the business has made a small profit for 2012.

I have very little contact with my family ( shareholders and directors) I was informed last week that I would not be receiving dividends as they are being used to pay the company back for the vehicle. I will receive dividends again when the vehicle is paid off.

This was all agreeded between the accountant (in fact its his idea to protect the profit line) t and the other 3 shareholders, I was not informed of any meeting regarding talking about the company figures/performance for 2012.

I am upset and unsure if they can do this... what are mu options!!!???

 

[Paul_Rosser]

If the vehicle in question belonged to the company you can't just be given it without paying the necessary tax on it, did you declare it on your personal tax return ?

Also there may be a question that your parents were not in a position to give you the vehicle if the company is part-owned by others.

 

[Chris Ashdown]

I would have thought that the matter of the car would be up to Directors to decide by a simple vote

My understanding of the law would be that dividends if made must be made to all shareholders equally pro rata to their percentage holding

They should not be withheld and if directors think you owe money for the car it would be a seperate issue andif nesassary sorted out in court if your parents acted lawfully in giving your the car

As a shareholder you should still be given notice of any shareholders meetings and the right to attend as well as a copy of the published accounts

Note whilst shareholders own the company between them, they ellect directors to run the company for them and unless also a director should have no say in the day to day running of the company except at shareholders meetings where they have the powers to
remove the directors

 

[templateagreements]

Assuming you don't have a shareholders agreement, I think it might be a good idea to get a copy of the memorandum and articles of association of the company and read them through. It should at least clear up some of the unknowns around directors’ powers and responsibilities, director meetings, directors’ remuneration, paying dividends, and organisation of general meetings, such as notice of meetings, voting rights etc.