Leaving a company as a director and shareholder advice
Discussion
I'm currently one of 2 equal directors in a business and have a 40% share in the business also (other director has 40% and another shareholder has 20%), and have accepted a position with a company in a senior (ish) position.
Just wondering what happens with regards to the directorship and my shares? I signed a directors guarantee for some equipment that we lease so need to get out of that but don't know how that works? If I'm removed from companies house as a director am I still liable for the equipment if the company goes bump?
How does it work with the shares? The company isn't worth a great deal. Turns over £250k per annum and has been going for 3 years. I know it has to be valued (who pays for that?) and what happens then if the other shareholders can't afford or don't want to buy my shares from me?
Hope that makes sense. Thanks in advance
Just wondering what happens with regards to the directorship and my shares? I signed a directors guarantee for some equipment that we lease so need to get out of that but don't know how that works? If I'm removed from companies house as a director am I still liable for the equipment if the company goes bump?
How does it work with the shares? The company isn't worth a great deal. Turns over £250k per annum and has been going for 3 years. I know it has to be valued (who pays for that?) and what happens then if the other shareholders can't afford or don't want to buy my shares from me?
Hope that makes sense. Thanks in advance
Do you have a shareholders' agreement?
You can resign as director by giving notice as required by the company's articles. What happens to your shares, if not already provided for by an agreement, would have to be a matter for negotiation. The shares may have little value as the company is small and its shares are not traded on any market. Shareholders agreements usually provide for exit from the shareholding, with various methods of valuation, sometimes depending on whether the person leaving is classed as a good leaver or a bad leaver. Cost of valuation will be provided for in such an agreement, but absent that would be a matter for negotiation. Eg: agree to ask a neutral firm of accountants to value the shares.
As for the guarantee, I cannot advise on that without knowing its terms. Does it impose liability only so long as you remain a director? Otherwise, you may remain liable so long as the company does, but all depends on the terms of the guarantee. Hs anyone given you any cross guarantee or indemnity?
You can resign as director by giving notice as required by the company's articles. What happens to your shares, if not already provided for by an agreement, would have to be a matter for negotiation. The shares may have little value as the company is small and its shares are not traded on any market. Shareholders agreements usually provide for exit from the shareholding, with various methods of valuation, sometimes depending on whether the person leaving is classed as a good leaver or a bad leaver. Cost of valuation will be provided for in such an agreement, but absent that would be a matter for negotiation. Eg: agree to ask a neutral firm of accountants to value the shares.
As for the guarantee, I cannot advise on that without knowing its terms. Does it impose liability only so long as you remain a director? Otherwise, you may remain liable so long as the company does, but all depends on the terms of the guarantee. Hs anyone given you any cross guarantee or indemnity?
Edited by anonymous-user on Wednesday 29th March 14:21
Been there and bought the T-shirt, almost exactly as you say.
If you have signed the guarantee as a 'personal guarantee', which is 'joint and several', then yes, you will still be liable for the machinery. Even if you have a tinpot asset, the joint and several will be for ALL the debt, and can be chased on you, and just you, if they so wish.
Before resigning, you MUST get rid of any PG's.
Dependent on the timescale from you resigning as a director, and the company going pop, suppliers may have the ump with you in the future should you wish to have things on credit again.
You can resign as a director, without affecting shareholding.
If you have signed the guarantee as a 'personal guarantee', which is 'joint and several', then yes, you will still be liable for the machinery. Even if you have a tinpot asset, the joint and several will be for ALL the debt, and can be chased on you, and just you, if they so wish.
Before resigning, you MUST get rid of any PG's.
Dependent on the timescale from you resigning as a director, and the company going pop, suppliers may have the ump with you in the future should you wish to have things on credit again.
You can resign as a director, without affecting shareholding.
I add that a lot of the law is not rocket science, but if you enter into business relationships it pays to take some time familiarising yourself with the key documents and what they mean, and if in doubt take advice before a problem arises, rather than later on when you may be fighting fires. A few quid on advice at an early stage can save you a lot of expense and hassle later on.
IANAL so listen to BV but I'd ask if you want/need to surrender your directorship and/or shares.
We had the same situation with one of our Directors/shareholders and they spoke to their new employer who didn't have an issue with it so they retained their directorship & shareholding of our company whilst employed by a completely separate one.
We had the same situation with one of our Directors/shareholders and they spoke to their new employer who didn't have an issue with it so they retained their directorship & shareholding of our company whilst employed by a completely separate one.
That is a sensible point.
Does the business of the new employer compete with that of the company you are currently with? Does the shareholders' agreement require you to resign as director if you resign as employee? Does it compel you to sell the shares if you leave as director and/or employee? Do you have a separate written employment contract?
Does the business of the new employer compete with that of the company you are currently with? Does the shareholders' agreement require you to resign as director if you resign as employee? Does it compel you to sell the shares if you leave as director and/or employee? Do you have a separate written employment contract?
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