Director/shareholder passed away.

[Steve57]

Cheers Neil, were doing ok i guess. Luckily work is mega busy so no down time to think why the F didnt he do it all by the book.

Had thought of giving Chris a call actually. Funeral is next tuesday and have been busy sorting that but will get on top of everything after then.

[Steve57]

Just a quick update on this,


WHAT A COMPLETE fk UP!!!!!!!! that is all.

Note to ANYONE if you have a step mum do NOT trust them.

Sadly it looks like we will have to pay the estate for dads business albeit he was giving it to us as a gift.

His estate is worth in the region of £750-800k yet we are set to get nothing and have the privilege of paying for the family business.

As all the money (so we are told but dont completely trust) is in the house and Classic cars she gets the lot under intestancy rules.

Have a meeting on monday with a Intestancy solicitor to see what options are available. Our main gripe being that once it is all handed over to her when she passes away HER children alone will get the estate.

Edited by Steve57 on Tuesday 9th September 08:14

[The Tea Boy]

Steve57 said:

Have a meeting on monday with a Intestancy solicitor to see what options are available. Our main gripe being that once it is all handed over to her when she passes away HER children alone will get the estate.

Edited by Steve57 on Tuesday 9th September 08:14

This happened to my best friend a few years ago, mum died of cancer, dad got re married 3 years later then died 6mths later, no will my friend and sister got nothing!

doesnt seem right or fair to me

sorry to hear she kicked off and ended up being a bh!

Matt

[gregf40]

The Tea Boy said:

This happened to my best friend a few years ago, mum died of cancer, dad got re married 3 years later then died 6mths later, no will my friend and sister got nothing!

doesnt seem right or fair to me

sorry to hear she kicked off and ended up being a bh!

Matt

It is ridiculous.

OP do you have any correspondence (emails or anything) between you and your Dad which mention him giving you the business if he passed away?

[sgrimshaw]

What if you are not prepared to pay her for your father's shares, no law to say you have to.

Why not just wind the business up and start again on your own.


Lots of options to be equally awkward I would have thought - hopefully she will see sense.

Edited by sgrimshaw on Tuesday 9th September 11:26

[Steve57]

sgrimshaw said:

What if you are not prepared to pay her for your father's shares, no law to say you have to.

Why not just wind the business up and start again on your own.


Lots of options to be equally awkward I would have thought - hopefully she will see sense.

Edited by sgrimshaw on Tuesday 9th September 11:26

This is an option that we are looking into.

The solicitor is also looking into the articles of association to see if we can refuse her as a shareholder.

Going to be a long drawn out road me thinks.

[2.5pi]

Steve57 said:

This is an option that we are looking into.

The solicitor is also looking into the articles of association to see if we can refuse her as a shareholder.

Going to be a long drawn out road me thinks.

I've been down a similar road myself, key was a shareholder agreement that laid out in detail what would happen in the event of the death of a shareholder. Do you have one ?

Good Luck!

[Steve57]

No shareholder agreement inplace, main reason being is we never knew we were shareholders. My dad has been Ill for a few years prior to passing away, in Oct 2012 we were given 1 share each (3 of us) and dad kept the remaining. at the same time we were all made directors which i never found out until some 6 months later. Failure on the accountants part? who knows.

So when i spoke to the accountant recently i then found out about the shares

[anonymous-user]

2.5pi said:

I've been down a similar road myself, key was a shareholder agreement that laid out in detail what would happen in the event of the death of a shareholder. Do you have one ?

Good Luck!

It is VITAL that you check the shareholder agreement and company articles. It's unlikely that special provisions were made but it is possible.

[Simond S]

you cant refuse her as a shareholder, but you can as a director.

tbh. if it has got this far I would be looking to start afresh, advise clients of the situation and allow them to move with you or find a new supplier (not sure what your company does).

Most buyers have a sense of fair play so you should lose much business, but will have a vested interest whereas at the moment you are working for her.

[anonymous-user]

Simond S said:

you cant refuse her as a shareholder, but you can as a director.

as she will own 97% she can very easily appoint someone as a director.

I would certainly be looking to set up elsewhere if a deal can't be struck.

[sgrimshaw]

As said above the articles could well be your saving grace.

You really need to check what happended in 2012 when you were given shares etc

You might find that the matter of your fathers death was taken care of at that time to safeguard the company.

Some useful information here, but your solicitor should be looking into this:

http://www.companylawclub.co.uk/topics/what_happen...

[darreni]

sgrimshaw said:

What if you are not prepared to pay her for your father's shares, no law to say you have to.

Why not just wind the business up and start again on your own.


Lots of options to be equally awkward I would have thought - hopefully she will see sense.

Edited by sgrimshaw on Tuesday 9th September 11:26

If you look at this route, you need to very careful you do not fall foul of the law, Directors have legal responsibilities to its shareholders, there is some good information here:

http://www.companylawclub.co.uk/topics/directors_d...

Note as well that a majority shareholder can force the removal of the directors if things get messy.

http://www.lawdonut.co.uk/law/ownership-and-manage...

[Johnniem]

Steve57 said:

Just a quick update on this,


WHAT A COMPLETE fk UP!!!!!!!! that is all.

Note to ANYONE if you have a step mum do NOT trust them.

Sadly it looks like we will have to pay the estate for dads business albeit he was giving it to us as a gift.

His estate is worth in the region of £750-800k yet we are set to get nothing and have the privilege of paying for the family business.

As all the money (so we are told but dont completely trust) is in the house and Classic cars she gets the lot under intestancy rules.

Have a meeting on monday with a Intestancy solicitor to see what options are available. Our main gripe being that once it is all handed over to her when she passes away HER children alone will get the estate.

Edited by Steve57 on Tuesday 9th September 08:14

OP, please keep us updated on how things pan out. I am in exactly the same situation with a step mum who was left my Dad's entire estate (in this will) and so far she flatly refuses to make a will. The executors, (neither me nor my sister) is pressing her but she seems to be resistant. If she dies intestate the entire estate will go to her distant cousins. WTF?!! I wish you luck with it fella. Nightmare city!

[Steve57]

Well, latest is my sister and me went to see her on monday evening, had a lengthy discussion which if truth told dont think got us anywhere. BUT the end result was she has said we will be included in her Will, but she has yet to do that. Hmmmm.

The business side of things is the awkward one tho. Her words, when your dad died it all became MINE!!!! i can sign the business over but now you have involved a solicitor i cant.. WTF, the accountant advised me to get one sorted to deal with it.

As for requesting £40,500 from us for the shares i told her to pock it, dad was giving it to us as a gift, if she wants that money for it we cant afford to buy it, so do as you please with it, Her reply was i DONT want it, ok so give it to us.

Latest is we are waiting for a letter from her accountant (why its not a solicitor i dont know)

[undred orse]

You really must take your own legal advice before going further.I think that you are not in full possession of the effects of intestacy.

I cannot emphasise enough that you need advice and guidance urgently.Do not leave something this important to the internet.

[anonymous-user]

Steve57 said:

sgrimshaw said:

What if you are not prepared to pay her for your father's shares, no law to say you have to.

Why not just wind the business up and start again on your own.


Lots of options to be equally awkward I would have thought - hopefully she will see sense.

Edited by anonymous-user on Tuesday 9th September 11:26

This is an option that we are looking into.

The solicitor is also looking into the articles of association to see if we can refuse her as a shareholder.

Going to be a long drawn out road me thinks.

Looking into winding up the company as an option won't take long.

If it is insolvent, you're better off winding it up now (and subject to being able to trade out of insolvency, may be obliged to). But then you won't be getting any money and nor will the step mother.

If it is solvent, winding it up means selling the business (to who?) and distributing the proceeds, after payment of liabilities, to the shareholders. Ie: step-mother.

Simply diverting the business into your new pet company and leaving the existing company is (a) unlawful; (b) will result in step-mother claiming ownership of newco.

If you can't establish a will existed, your Dad's shares have indeed passed to step-mother, and you work for her company. Often a small company's articles give a right to the directors to refuse to register a transfer of shares to a new shareholder. The best this will get you though, if you have that option, is that your step-mother will end up haing to sell the shares to someone you will argee to register. Which requires a deep-pocketed buyer. Furthermore, there are restrictions on the exercise of the directors' powers in these circs in any event.

Your best and possibly only negotiating chip is likely to be that she can't run the business without you, and were you all to resign tomorrow the company would collapse leaving everyone with nothing. OTOH the lifetime of this chip isn't long: once she finds directors who can replace you, you're fooked.

Sorry. Horrible situation to be in.

Edited by anonymous-user on Thursday 11th September 21:36

[Steve57]

undred orse said:

You really must take your own legal advice before going further.I think that you are not in full possession of the effects of intestacy.

I cannot emphasise enough that you need advice and guidance urgently.Do not leave something this important to the internet.

Its all in full swing, we are waiting for a reply from her accountant (dont think she has a solicitor involved)

[Steve57]

Greg66 said:

Your best and possibly only negotiating chip is likely to be that she can't run the business without you, and were you all to resign tomorrow the company would collapse leaving everyone with nothing. OTOH the lifetime of this chip isn't long: once she finds directors who can replace you, you're fooked.

Sorry. Horrible situation to be in.

Edited by Greg66 on Thursday 11th September 21:36

I said this to her earlier in the week, her reply was i dont want the company, ok so sign it over as dad wished as a gift, as above we are waiting the reply from her side on this matter.

[Steve57]

Guess it time for an update, Still on going.

6 months ago we had a letter stating she would transfer for Nil consideration, then changed her mind in april. we have had a barrister look at the articles and we can refuse her as shareholder as long as we have a truly valid reason. At the moment we are also looking at making her redundant as she has NO input into the company and draws around £500 per month from it, wages only part is £48 per week so it will cost us around £2k and we save £500 per month so the Solicitor is looking into this.
Apart from that they have been very slow in replying so it seems to take an age to get a reply of any sort.
I wont lie, its starting to get to me now and I'm very tempted to walk away if the right offer came along.