Asshat of a Director - LTD / Sole trader status

[moustachebandit]

The other half is a director in a small LTD company with 2 other directors.

Over the past few months one of the directors (the main share holder) has been trying to make moves to push the OH out of the business.

Its all come to a head recently and the OH offered them a deal to buy her out - she wants to walk away from a fairly toxic business relationship but understandably wants something to show for her hard work.

It appears that the main shareholder has gone and registered as a sole trader, whilst also being a director of the OH's company and has openly stated in an email that he plans to funnel work from the LTD company to his Sole trader business so that the LTD company withers and dies (whilst at the same time running up his sole trader business costs against the LTD company). Essentially he is doing this to avoid paying out anything to the OH because he is a tightfisted bitter little man who would skin a turd for a tenner.

I was just wondering if anyone has been in a similar situation before? Does anyone know where the OH stands legally on this - clearly the other director is acting against the best interests of the LTD company but is there any real way to bring him to task on this? Done a few Googles and it all seems quite vague about legal position and accountability.

• edit to add - there is another director in this who may / may not be in cahoots with the main shareholder. The 3rd director is pretty clueless to the whole LTD / director thing so probably doesn't understand whats going on anyway.

Any advice is appreciated.

Edited by moustachebandit on Monday 21st March 16:53

[akirk]

in theory he might be doing dodgy things - i.e. expenses should be against the business they refer to etc.
but... the first consideration is:
- possible value of her shareholding
- personal wealth
- how much you want the hassle
then you might find it worth pursuing him through the courts...

otherwise, you might find it simplest to walk away and chalk it up to life experience...
you are likely to have a lot of cost / hassle, for perhaps no real return

[lostmotel]

Depending on the amount of money at stake I would consider getting some specialist advice. As with most disputes you will probably be able to map quite a few remedies (a claim against the director for breach of duties, a claim for unfair prejudice against a minority shareholder, or the nuclear option of a winding up petition) on to the problem, but you need someone with experience to advise which will work in practice.

[Jockman]

What does her Shareholder agreement say?

Are there provisions for good leaver / bad leaver?

[moustachebandit]

Guys, thanks for taking the time to respond to this. Amazing what a day or two can make. After the last exchange with the ass hat we maintained radio silence and it appears to have paid off.

He has gone from demanding the full nuclear option which was a case of cutting his nose off to spite his face to actually agreeing a pay out. Makes a change that something goes our way for once! Now it means we can move on to bigger and better things without feeling to bitter about the whole situation.

Result!