The K M Links Game - November 2024 Week...
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directors of business
4 Answers
My Father recently died, he was a Director in a shared business along with his cousin and had half shares in the company premises.The companty stopped trading 5 yrs ago.
The cousin has now taken control of the premises and is planning to charge my mother rent for using the old workshops....can he do this ??? He also took out an unauthorised loan when the company was trading of �35.000, is he liable to pay this back ??
The cousin has now taken control of the premises and is planning to charge my mother rent for using the old workshops....can he do this ??? He also took out an unauthorised loan when the company was trading of �35.000, is he liable to pay this back ??
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Firstly, sorry to hear about your loss - to give a meaningful answer it would be useful to have the following information.
1) When the business stopped trading, what happened - is it a dormant company or was it wound up?
2) What premises has the cousin taken over? Is it owned by the company or him individually or is it leased? Who has taken care of these premises for the last 5 years?
3) No he can't charge your mother - though he can possibly charge the business.
4) If he took out a loan 5 years ago has he been paying it back? How long was it taken out over? Who signed the documents (as a board resolution would have been needed which would have involved a quorum of Directors to sign).
5) What makes you think it was an 'unauthorised' loan - and have the authorities been notified if fraud is suspected?
1) When the business stopped trading, what happened - is it a dormant company or was it wound up?
2) What premises has the cousin taken over? Is it owned by the company or him individually or is it leased? Who has taken care of these premises for the last 5 years?
3) No he can't charge your mother - though he can possibly charge the business.
4) If he took out a loan 5 years ago has he been paying it back? How long was it taken out over? Who signed the documents (as a board resolution would have been needed which would have involved a quorum of Directors to sign).
5) What makes you think it was an 'unauthorised' loan - and have the authorities been notified if fraud is suspected?
The business is a dormant company, a small building firm with 2 directors, The premises is owned jointly by my Father and his cousin, as he is the only surviving director, he is making all the decisions regarding the workshop, saying my mother has no rights,other than half the profits if he decides to sell.
My father has been maintaining the workshop over the last 5 years paying rates etc.
The accountants discovered that had taken money through the business and they have tied it up with the debt clearly at his door with documentation signed by him saying that he owes the money.My father also put his own personal money into the company, which again the cousin signed to say that when it was repaid it would be repaid with 9% interest.
How much clout does he have given that he is the only surviving director??? If we force him to pay it back, effectively half the money goes back to him, can we force a sale on him or indeed can he sell over our heads ????
My father has been maintaining the workshop over the last 5 years paying rates etc.
The accountants discovered that had taken money through the business and they have tied it up with the debt clearly at his door with documentation signed by him saying that he owes the money.My father also put his own personal money into the company, which again the cousin signed to say that when it was repaid it would be repaid with 9% interest.
How much clout does he have given that he is the only surviving director??? If we force him to pay it back, effectively half the money goes back to him, can we force a sale on him or indeed can he sell over our heads ????
I agree - it sounds a mess. One point though. Each director would have shares in the ltd. co. Your father presumably made a will and under that his shares will have been left to someone (your mother?) If the shares were owned 50% by your father & cousin then your mother now owns 50% of the company so any decisions which need formal approval can only be made with her consent (I think!). She should be appointed a director & Board meetings held.
But you definitely need legal advice.
But you definitely need legal advice.
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