Limited Company Director(2 Posts)
Hi all. DH has agreed to make me a Director of his company. Currently, I have a 10% shareholding, 1 other person has 10% and DH has 80%. He has agreed to increase my shareholding to 20% (I wanted 25).
Does this give me any power within the business? He's tasking me with buying a new premises .. will i be authorised to sign and apply for mortgages etc? Or is it just a fancy title? And it'll still need his signature as the majority shareholder? Does my % of shares mean anything? Isn't 25% the magic number?
Thanks in advance.
25% allows you to block special resolutions, such as changing the company name, striking it off etc., i.e. the fundamental stuff. However, it doesn't give you any "rights" in the normal day to day running of the company. Anything above 50% is enough to pass "ordinary" resolutions, such as voting a dividend, issuing new shares, agreeing to buy/sell shares, voting on new directors, etc.
But, as a director, you do have "power" to sign contracts, etc., but you have to act within your powers as granted by the Board of Directors. I.e. you need a board minute to give you the power to sign contracts etc. As for buying property and getting a mortgage, almost certainly, the lender/solicitor would require two directors' signatures on the paperwork - and the lender probably wants a signed board meeting minute to prove Board approval of buying a property and obtaining a mortgage. 2 signatures is pretty standard for the big stuff as "proof" for the third party that proper authority has been obtained.
By the sound of things, you have doubts about your role. Rather than rely on company law, articles of association, etc., you'd be far better getting a proper shareholders agreement and directors' contract drawn up by a solicitor so that you all know where you stand, your rights & responsibilities are clearly laid out etc - that means all concerned know where they stand.
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