Suspicious company member?

[daffey]

Hi,

I have problem that I need advice on, I will try to keep it brief.

Basically 3 years ago I setup a marketing company with 1 family member and 2 friends (4 in total).

I am one of the two directors. The two directors and one of the shareholders are signatories on the company bank account.

Recently I noticed some withdrawals that I could not explain. On subsequent investigation I found out who made these withdrawals. It was the not the other director but the shareholder. They also wrote cheques that I am now suspicious of.

With the scrutiny that followed they resigned from the company. As none of us get paid (only share of profit) it essentially means they’re no longer going perform their duties in the company which were that of company accountant. They now want to sell their shares. However they still have not explained the transactions satisfactorily. They also neglected to keep books up-to-date making it impossible to value the shares. The two explanation they offered were proven to be false. They no longer are accepting communication from the remaining company members.

This has being going on since 15.7.06. I know what I think the reasons for delay are, but what do I do next?

It is clear that this person will not cooperate with us.

What is the most serious and benign course of action to take?

 

[Riddler]

Daffey

Contact your bank and tell them that cheques have been paid not in accordance with the company mandate. If as you say two of three people were required to sign cheques and only one did then the bank has erred.
It is quite unusual for a shareholder to sign on behalf of a company...only board members (directors) or delegated staff can do so under resolution of the board.

Go to a good commercial lawyer and take legal advice immediately as you could have personal liability for company debts even where there may have been fraudulent activity by others..

Riddler

 

[daffey]

Riddler,

We intend contacting a solicitor, I am just getting an idea of what to expect. Also the cheques initally only required one signature. When I said "The two directors and one of the shareholders are signatories on the company bank account" I simply meant that each had access to the account.

We are a Small company, although he was a shareholder he was company accountant.

Thanks for your advice

 

[RainyDay]

Also the cheques initally only required one signature.

Surely this is never a good idea!