removing a shareholder

S

shylox

Guest
Our company has 3 directors with 75%, 20% and 5% shareholdings respectively. The 20% director has resigned due to a disagreement with the others. The company is not cash rich. Can we force him to sell his shareholding to the other directors or back to the company?
 
Don't think so. You can always issue new shares to dilute his percentage if you're worried about this. But a minority shareholding isn't worth much to anyone anyway, as it doesn't allow the owner to have any influence over company policy. Whoever owns the 75% might as well own the lot.
 
The issue isn't the running of the business, but the 20% share of the profits. Why should the major shareholder do all the work building up a business to have to give a 5th of the profits to a non-working shareholder?
 
You can put him in a situation of either "you buy me out or else you allow me to buy you out" - this of course depends on how you'd handle the fact that he may want to buy you out!!

Re the minority shareholding the minority shareholder could cause you a lot of problems if he so wished - he does have a fair number of rights.
 
The majority shareholder is in the position to determine what constitues profit. If he pays himself a bigger salary, the profit left over for the other shareholders is smaller.
 
Can you tell me is there a guideline as to what the salary of a working director should be? Is it a percentage of the turnover?
 
You must log in or register to reply here.
Back
Top