Company director - divorce - what's the worst he can do

[GrooveAngelWillBoogieAgain]

Hi - put bluntly, here goes:

I am a director and shareholder of my husbands limited company - in name only as I don't take an active role. The only other director is my husband.

I have discovered he is having an affair.

I am going to confront him about the affair - in all likelihood this will end in divorce.

As a director if his company how exposed am I? What's the worst my husband can do? Do I need to resign as a director before I confront him.

I don't "think" he will do something to set me up as it were but as he has been so deceitful about the affair I cant really trust that he will do something that will put me in an impossible financial position.

I'm not sure any of the above makes sense but hoping it does to someone on MN - any advice appreciated.

Get the memo & articles and have a read through, each company can be different (although I imagine that he's probably used the standard ones).
If you can't get them easily from him you can order them
From companies house for a small fee (a few pounds).
I think you're probably in a good position to negotiate, but I'd speak to a lawyer before you do anything.

I agree with babybarrister. I think you need more than a chat with a lawyer. You need to appoint one to represent you. Directors could have all sorts of personal responsibility if a company goes bust, but you don't want to be making any hasty decisions about whether to resign.

The company has no debts which is good and bank balance has a very healthy balance.

Good idea re mem and arts - and yes I am sure they are standard ones.

Thanks

I wouldn't think of you being a Director as being a bad thing necessarily. If your company is in a healthy position financially and trading profitably, then (assuming the worst does happen, I am sorry for your situation) you are also entitled to a share in the value of the business. Your husband would have to buy you out of this if required.

I would speak to a lawyer with a speciality in this area.

If he goes out and secures a load of debt in the companies/his name though you could find yourself liable for that debt.

It happened to someone in our family.

Thankyou everyone for your advice - I think I'll probably resign as a director but try and remain as a sharehokder

Please appoint a lawyer to represent you and take their advice before deciding whether or not to resign.

How are the shares split? are you paid in dividends? (I presume yes and this is why you are a director to reduce tax).
Are there any restrictions with the bank regarding say cheques over a certain amount requiring two signatures? are you a signature on the bank account?
Resigning as a Director and selling or transferring shares are very different things as is the access to the bank account.
Hope that helps a bit and sorry to hear what you are going through but you do the right things and hold of the emotions for a moment and be practical.

Ok, DO NOT CONFRONT HIM ABOUT THE AFFAIR, UNTIL you have photocopied every single piece of documentation that may help you to establish the value of the shares, the company, his salary and any other assets.

Photocopy salary slips, one year worth of company and personal bank accounts and credit card statements.

Once you do the photocopying, organise for shares/company to be valued. Talk to a solicitor firm with a strong background in finance to find out what position you are in (very often shares are not transferable or have a nominal value), then... spill the beans.

I don't think you should resign as a Director. While you are a Director you have some ability to control what the company does or doesn't do. If you resign you lose that control.

OP - if you follow the advice of Cartagena you may be breaking the law.

Case of Imermann:

www.bailii.org/ew/cases/EWCA/Civ/2010/908.html

Just saying.........

Stay a director then so you can have access to the documentation (nothing to stop you from photocpying personal accounts documents, and household related bills.

At the end of the day, if you can't prove how much the company is worth, you are pretty much stuffed.

Lots of inappropriate suggestions here - for instance the Imerman case is irrelevant as the OP has a right to obtain a copy of the documents because she is a director of the company.

Only good advice is to consult a lawyer with expertise in owner managed companies as well as family matters.

Imerman is relevant given the "advice" to copy personal bank statements and credit card statements.

It is also in my view inappropriate for an office holder of a company to take copies of employees payslips for non-company related purposes.

So Cartagena continues to advise OP to break the law....

Of course documents belonging to the company that are not confidential to, say, an employee, can be copied as OP has a right to do so as a director.

Well that was what prevented me from ending up living in the streets.

At the end of the day, if he is frank and open in his disclosure, those copies won't need to be used, if he isn't you can ask for them to be used as evidence. If they say no, they say no. IME having a copy of his personal accounts helped me to find out that he had been diverting funds to an undisclosed account and to prove that a 5 figure debt aquired months after the split was not a joint debt we had acquired while we were together. The judge ordered the ex to submit the specific documents.

So don't brake the law, just have a look at those documents while you are married as any involved wife would exppect to do as part of their marriage partnership.