Company Law Help please

Discussion in 'Bulletin Board' started by Sooty9, Sep 22, 2020.

  1. Sooty9

    Sooty9 Active Member

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    Hope I explain this correct

    Simplified if possible.
    I have shares in a LTD company that owns residential rented property. Me and 2 others . One lives in America, he has nothing to do with the business other than being a share holder.
    The other lives down south who is the majority holder.

    Me 17 shares
    America 38 shares
    Down south 68 shares

    None of us take dividends we just pay off the mortgages with the profits.

    Basically I either want dividends or I want out.

    Paying dividends isn’t the business model so wouldn’t go down well, so where do I stand if I want out? If Down South is not willing to buy me out, where do I stand?

    Hope that’s understandable
     
  2. Sparky

    Sparky Well-Known Member

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    I could be wrong but I would have thought you could sell your shares to anyone you want
     
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  3. Andy Mac

    Andy Mac Well-Known Member

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    Are there any covenants?

    Sell them to BFC Investment Trust
    Or Oakwell Holdings
    Or something .......
     
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  4. icer

    icer Well-Known Member

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    Other owners got wind of this and now are looking to move house ;-)
     
  5. Dan

    DannyWilsonLovechild Well-Known Member

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    Is there a share agreement in place? Are the company articles standard, or anthing unusual about its purpose and governance? I.e. what happens if one of the parties wants to relinquish their shares? If there isn't, you could sell to anyone who liked the look of the investment. But in all honesty, most people, and probably moreso at the moment, would like to deem revenue from it and earn income from the business.

    There are a few accountants and solicitors on here who may offer a bit of private guidance away from prying eyes which I'd probably recommend before sharing too much detail.

    Hope it works out for you.
     
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  6. Sooty9

    Sooty9 Active Member

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    I realise I can sell to anyone but that would mean finding someone that would buy them under the same agreement, ie, no dividends etc. We don’t Have any agreement documents just an understanding that profits pay off mortgages for the end game.

    There’s nothing in place to say one share holder has to buy another one out but I think I would find it hard to find a buyer to agree to there terms. My main question is , if the main share holder doesn’t want to buy me out where do I stand?
     
  7. Sooty9

    Sooty9 Active Member

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    Yes I could but finding a buyer would be different due to the business model of paying off mortgages with profit
     
  8. Sup

    SuperTyke Well-Known Member

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    Daft question but if the profits were paid out in dividends how would the mortgages be paid? Is it that they're being paid much quicker than they need to be so you own the property outright soon?
     
  9. Dan

    DannyWilsonLovechild Well-Known Member

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    I would say you're stuck unless you source your own deal. In which case, you may as well sit on them to benefit from the end game yourself.

    Or you could bring it up casually and suggest some interim payments. There may be some tax advantage taking some profits now if people havent used up allowances (ask an accountant though, dividend taxation has changed in recent years so would have to be considered in your respective cases).
     
  10. Sooty9

    Sooty9 Active Member

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    Yes.... The mortgages are interest only. We own 3 outright. So basically once the monthly repayments are paid and maintenance/costs are deducted the remainder is profits which we use to pay down the mortgages.
     
  11. Sooty9

    Sooty9 Active Member

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    What you have just said is basically what I thought my options are
     
  12. Dar

    Darfield138 Well-Known Member

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    I do not see how anyone could advise you without seeing the articles of association when the limited company was first formed. As someone else posted you could (and probably did) adopt standard articles. However, sounds like you have at least a five figure investment, properly instruct a specialised lawyer and give them the full facts (not just the bits you like) and then decide where you go
     
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  13. Sooty9

    Sooty9 Active Member

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    Thanks..... I’ll look into that... I didn’t want to rock the boat before getting some kind of advice tho.
     
  14. lk3

    lk311 Well-Known Member

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    This, I give all my contracts to a Solicitor to look over and advise, usually cost around £300 dependant on size and contents, either way it would be money well spent.
     
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  15. Dar

    Darfield138 Well-Known Member

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    Nobody needs to know you have been to see a solicitor. Make it clear to the solicitor you are instructing them personally and not on behalf of the company
     
  16. Sooty9

    Sooty9 Active Member

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    Thanks. I was referring to the Articles of Association. I don’t have any paperwork regarding this . I don’t think we have any. My main issue is as the minority share holder and not a director then I don’t have the power to change the business model to receive dividends and will struggle to find a buyer to purchase my shares under the said business model. I’m assuming I’m stuck with the shares until the end game
     
  17. Dar

    Darfield138 Well-Known Member

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    Google companies house and press start now, find company and then click on filing history. The articles should be the first doc filed on there.

    As a shareholder you can demand to see all company records at the registered office or the alternative filing address, again this will be on companies house. Shareholders don't run the company but can effectively remove the directors, vote on dividends etc at the AGM

    Cut and paste this to get started

    https://beta.companieshouse.gov.uk/
     

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