Shareholder misdoings in business
Discussion
Hi guys,
I am a 50% shareholder and owner in a small business with another 2 shareholders each owning 25%. They were fiancées but have since split up. He has seen fit to take her ordinary share and place it in his new girlfriends name without the ex's permission.
This is all logged on Companies House by him.
In previous conversations with him, his attitude was she didn't contribute financially from the start so is not entitled to the share.
Although we all put up in lots of hard work, time effort etc and she continued to work there all hours for free until she resigned after the split.
According to a Companies House document I found, the purchase of shares can be for goodwill, services, goods and so on and not wholly for cash.
In my mind he has effectively stolen her share and has either broken the law or committed fraud. Am I right?
There is no stock transfer forms completed and his ex was not aware of the transaction until now.
I have a meeting with him to discuss on Monday so all information/advice gratefully received.
Cheers in advance.
I am a 50% shareholder and owner in a small business with another 2 shareholders each owning 25%. They were fiancées but have since split up. He has seen fit to take her ordinary share and place it in his new girlfriends name without the ex's permission.
This is all logged on Companies House by him.
In previous conversations with him, his attitude was she didn't contribute financially from the start so is not entitled to the share.
Although we all put up in lots of hard work, time effort etc and she continued to work there all hours for free until she resigned after the split.
According to a Companies House document I found, the purchase of shares can be for goodwill, services, goods and so on and not wholly for cash.
In my mind he has effectively stolen her share and has either broken the law or committed fraud. Am I right?
There is no stock transfer forms completed and his ex was not aware of the transaction until now.
I have a meeting with him to discuss on Monday so all information/advice gratefully received.
Cheers in advance.
I'm fairly sure he's acting illegally. I think you can't change share allocations without permission from all share holders.
I'm being vague because I've largely forgotten, I looked at the rules a few years back, and seem to recall it's not legally as simple as your partner has done.
I would guess that his ex is in a good position to take legal action.
I'm being vague because I've largely forgotten, I looked at the rules a few years back, and seem to recall it's not legally as simple as your partner has done.
I would guess that his ex is in a good position to take legal action.
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