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Shareholders agreement(6 Posts)
I signed a shareholders agreement in 2017.
Shares as follow, I own 45%, 1 own 15%, 2 other own 40% visa company purchase.
The two who own 40% via their company made changes so that they both held 20% each under their own name ( the other 2 Directors were not offered to buy their shares) this is part of the shareholders agreement that before sales, gifted shares etc need to be asked and offered to.the two other directors before this change should have taken place.
From what my understanding is that the shareholders agreement is now void.
Am I correct?
If so what so we do next?
I don't understand the split. It doesn't equal 100%.
Can you go over that again please?
At the start their was shareholders
1. 45% Individual person
2. 15% Individual person
3. 40% Company (lets call it Direct Ltd. Which os owned by 2 shareholders)
Direct Ltd changed via companies house their shares from Direct Ltd 40% to John Smith 20% and Richard Smith 20%
So now we have 4 shareholders.
This was never agreed to by the other two shareholders.
The shareholder agreement has a clause thay says they must offer their shares to fellow shareholders before selling, transfering or gifting.
Are John and Richard Smith the Directors of Direct Ltd, did they set up the (Direct) company initially?
I'm not an expert but I wouldn't have thought it voided the agreement/articles, but a breach of the agreement/articles can be legally enforced. Not sure how you take action though, it's a long time since my
brief dealings with limited companies.
I really would seek legal advice, ask your accountant in the first instance (especially if they set up the limited company for you).
One of the parties to an agreement breaching a clause in it doesn’t then make the whole agreement “void”, no.
If you want to get that clause enforced, best bet is to see a solicitor and ask about next steps.
The transfer of shares by Direct Ltd to its shareholders is ineffective unless the company in which you are a shareholder registers the transfer. If your company has not registered the transfer it hasn't happened. This is not something Direct Ltd can do on its own. Direct Ltd needs to lodge the transfer with your company. If your Articles of Association give the directors power to refuse to register the transfer (the Articles of most private companies include this power but you will need to check) they can do so provided they notify Direct Ltd, giving reasons, within 2 months of the transfer being lodged.
If the transfer has been registered that may be a breach of the shareholders agreement but, given that effective control of the shares hasn't changed, it depends on the exact wording of the agreement and who was party to the agreement (John and Richard Smith personally or Direct Ltd). Even if the agreement has been breached it does not render the whole agreement void. It simply means that you and the other shareholders can take action to enforce the agreement.