Directors and money in company bank account

[2Btoo]

Hi,

Question about company assets and how they can be divided.

Situation is thus:

- Company A exists which owns some properties and has some money in the company bank account
- Company A has a director who is a 60% shareholder, let's call her 'Z'.
- Company A also has a couple of other shareholders, one of whom is also a director. Total shareholding of everyone else is (not surprisingly) 40%.
- The properties owned by company A are being split, with some of them being taken off to a new company ('Company B') whose shareholders and directors will be those who don't have the 60% shareholding in Company A. They will give up their stake in Company A as part of the split.

Company A has a sum of money in the company bank account. Director 'Z' is trying to claim that the money should remain in the Company A bank account and not be split along the lines of the proposed division. The other director and the shareholders don't want this to happen - they want the money to be split in the same proportion as the property.

Put very simply, can the director dictate the split of the money in the company bank account? My understanding is that she can't as she is not the sole shareholder; the company assets are part of the company and the company is owned in shares by the shareholders. Therefore one single shareholder can't dictate what should happen in this situation, despite the fact that the director in question is a majority shareholder.

IF the director can't forcibly withhold the money from the split then how do the shareholders prevent this from happening?

This question will betray my naivity in many ways. I think this is probably a very simple question but it's a real situation and I don't know much about how this sort of thing works.

Thanks!

[2Btoo]

W1bbles,

Thanks. That's helpful. Snag is that I have reached the limit of my understanding and I'd rather not give the company name as it will make everything very identifiable ....

Mems and Arts: Don't know, I've not read them. I must do so.
Shareholders Agreement: Would that be an agreement about the split or a more general thing?
Basis of the split / is there a contract: It's a family company and essentially the assets are being split along family lines. Z's sibling is the other director and the two sides want to do different things with the assets - Z wants to keep them, the other director wants to sell. The split is to allow the other side to sell up and take the cash. Everything is very amicable hence we're a little bit at a loss as to what to do with Z's request for the money.

I don't know of that helps at all.

[2Btoo]

Guys,

Thanks. Lots of really helpful stuff. Thank you.

Specialist advice has been taken and the process of moving property between companies is indeed complex. Part of the problem is that Z has been driving the process and liaising with the specialists and the other directors have taken their eyes of the ball slightly. Z is not clue-y about how companies work and doesn't really understand what is going on and there is much confusion about a lot of things. I am currently trying to get a clearer view on what is proposed, including the split of the cash in the company bank account. Z has the idea that the cash should be withheld to fund maintenance of the property that will remain in Company A, hence the question.

Thanks for your help.