RE: Can't Get Secretary To Resign - What are my options ???

[rtgibson]

Almost at the end of a horrific divorce....my soon to be ex-wife is the company secretary and she refuses to resign. Its the usual husband/wife setup where she existed in name only - I did all the work and ran the company. We are 50/50 shareholders having 1 share each (£1).

I'm just asking really to see what options are avaliable to me - it would be nice to keep the company but since business contacts etc were always friends it wouldn't be the end of the world if I had to start again.....it would just be really really nice after nearly 10 years to keep things as they are minus her.

Can I sack her or force her resignation or anything ????

Thanks in advance for any ideas - I figured I'd ask the quick question first before going to a legal business place and roping in solicitors etc.

[Pondlife]

Can I sack her or force her resignation or anything ????

Thanks in advance for any ideas - I figured I'd ask the quick question first before going to a legal business place and roping in solicitors etc.

This won't stop her being a 50% shareholder though. You can either 'buy' her shares back assuming she's willing to do this (and I'm guessing not)

Or start a fresh company without her.

As a 50% owner of the existing company she is legally entitled to half of its assets I should think.

Sorry

[Clare@InTouch]

You'd need a majority of votes to sack her via an ordinary resolution I believe, but then she can't really do anything as secretary anyway. Your bigger concern is her holding 50% of the shares as she then owns 50% of the company and is entitled to 50% of the assets & dividends.

Have you started a new company, or are you still trading through the old one (with her involved)?

[northernladuk]

Start a new company, new bank account, change your contract so the new company is paid?

Can you you invoice your old company from your new one and pay all the remaining money to your new one out of interest?

[prozak]

Just start a new company. Much less hassle.

Control like this is the exact reason I am 80% shareholder.

Any assets or capital left in the company?

[TheFaQQer]

Start a new company, new bank account, change your contract so the new company is paid?

Agree.

Can you you invoice your old company from your new one and pay all the remaining money to your new one out of interest?

Danger here.

1 - VAT to pay on the transaction

2 - If you are selling everything to the new company (equipment etc.) at a rate which is way below the market value, then you would probably be in breach of your duties as a director of the original company not to get the best deal.

If the OP is currently working, then get a new company sorted quickly and start to get paid through that one.

Depending on how much money is in the other company, you could take the tax hit and pay yourself a whopping salary to get the money out. Or put it into a pension fund?

If there are other assets in the business, work out at what point they depreciate to nothing or next to nothing, and see whether you want to hold on to them for that long to get them out cheaply.

Best of luck with it all.

[d000hg]

Its the usual husband/wife setup where she existed in name only - I did all the work and ran the company. We are 50/50 shareholders

That's not the 'usual' setup, it's inflexible and irks HMRC as well as leading to the mess you're in now... make sure to avoid it in future companies (and wives).

As for now, in court couldn't you claim that as she does no work she isn't entitled to 50%? Or can you create 100 more shares and dilute her holding (like in The Social Network)?

Bummer though... sounds messy. A new company sounds best - what funds are in the current company? You can increase your salary as if you were in IR35 so there is no money to pay in dividends maybe?

[Clare@InTouch]

That's not the 'usual' setup, it's inflexible and irks HMRC as well as leading to the mess you're in now... make sure to avoid it in future companies (and wives).

As for now, in court couldn't you claim that as she does no work she isn't entitled to 50%? Or can you create 100 more shares and dilute her holding (like in The Social Network)?

Bummer though... sounds messy. A new company sounds best - what funds are in the current company? You can increase your salary as if you were in IR35 so there is no money to pay in dividends maybe?

Shareholders have protection to prevent their holdings being diluted in that way usually, not sure how it works in the US though.

[TheFaQQer]

That's not the 'usual' setup, it's inflexible and irks HMRC as well as leading to the mess you're in now... make sure to avoid it in future companies (and wives).

That's a silly subjective opinion.

[xoggoth]

Your bigger concern is her holding 50% of the shares as she then owns 50% of the company and is entitled to 50% of the assets & dividends.

Indeed, one of my nephews has just been told that same thing. It is a successful company almost entirely due to him, she just did a bit of office work, now the ghastly loony woman is due half if he goes ahead with the divorce.