Ltd Company- One director wants to buy out other

[inadilemma]

Hi
This Limited Company has 2 directors and each holds 50% shareholding.
Director 1 is no longer happy to continue working with Director 2. What are the options available to him if Director 2 refuses to go? Can Director 1 force Director 2 to go if he makes a reasonable and fair offer to him.

Director 2 will probably go reluctantly if enough money is offered. If however he refuses all offers will the company have to be wound up and the 2 directors go their own ways. The Company is under contract for various long term projects and it would not be easy to just wind up.

Thank you in advance for any help.

Regards
IAD

 

[contemporary]

The company still needs 2 directors, so director 1 will still need a replacement to step in if 2 goes

Is there a shareholders agreement, if not then it will be hard to remove him.

Hard to advise because its a relationship breakdown, not really a legal dispute,

As an aside company law probably needs to allow for a "divorce" like this.

 

[aidanh]

I know it doesn't address the legal issues but I think the following is a good way of finding the reasonable and fair price for a buyout, so long as both are in a position to buy out the other.

Director 1 specifies a value for their half of the company, a price they would be willing to either buy Director 2's half or sell Director 2 their own half. Director 2 then gets to choose which option they prefer.

It helps temper the way loss aversion makes us value things we have more than things we don't yet have. Your natural instincts would be to expect more for your half than you would pay for the other half.