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Hello all
There is a drama happening at my company currently, and I am after some advice please.
My company/business is run and owned by 5 owners, the ownership ratio is 4 owners hold 24.75% and 1 owner holds 1%.
The business has been running for 7.5 years. One of the 24.75% owners has had enough and has decided to leave. When we had our annual meeting with our accountant last year, I was not sure how the conversation got started but the accountant was talking about if one of the 24.75% owners walked out, how much money they could get. The answer was a 6 figures lump sum. I had no idea how the figure was worked out. Anyway, last week one of the 24.75% owners annouced he was leaving. All the sudden we, the remaining owners, were panicking. We simply did not know how we could afford to pay this 6 figures lump sum, so we contacted our accountant to seek for advice.
The accountant has now responded to us. To start with, the accountant said we have never finalised, agreed and signed a shareholders agreement, he claimed we do not have to buy the shares from the leaving owner. We pay ourselves dividends via the alphabet shares but not the ownership shares. So it is OK to have a dissenting shareholder owning 24.75%.
My questions are, is it legally correct that we are allowed not to pay dividends to these alphabet shares after the owner leaves? Secondly, is it better off not to have a shareholders agreement as it means whoever leaves the company we don’t need to buy their shares? Thirdly, although we are on the alphabet shares, when we received our dividends in the past, we had the same amount of money between us individually, so how can we legally be allowed to carry on paying the remaining owners dividends while the leaving one gets none? Finally, is it not illegal to run a business without a shareholders agreement?
Apart from the above questions, if there are anything that we are doing illegally, I would like to know too, so I can flag it up to the other owners.
Many thanks in advance.
There is a drama happening at my company currently, and I am after some advice please.
My company/business is run and owned by 5 owners, the ownership ratio is 4 owners hold 24.75% and 1 owner holds 1%.
The business has been running for 7.5 years. One of the 24.75% owners has had enough and has decided to leave. When we had our annual meeting with our accountant last year, I was not sure how the conversation got started but the accountant was talking about if one of the 24.75% owners walked out, how much money they could get. The answer was a 6 figures lump sum. I had no idea how the figure was worked out. Anyway, last week one of the 24.75% owners annouced he was leaving. All the sudden we, the remaining owners, were panicking. We simply did not know how we could afford to pay this 6 figures lump sum, so we contacted our accountant to seek for advice.
The accountant has now responded to us. To start with, the accountant said we have never finalised, agreed and signed a shareholders agreement, he claimed we do not have to buy the shares from the leaving owner. We pay ourselves dividends via the alphabet shares but not the ownership shares. So it is OK to have a dissenting shareholder owning 24.75%.
My questions are, is it legally correct that we are allowed not to pay dividends to these alphabet shares after the owner leaves? Secondly, is it better off not to have a shareholders agreement as it means whoever leaves the company we don’t need to buy their shares? Thirdly, although we are on the alphabet shares, when we received our dividends in the past, we had the same amount of money between us individually, so how can we legally be allowed to carry on paying the remaining owners dividends while the leaving one gets none? Finally, is it not illegal to run a business without a shareholders agreement?
Apart from the above questions, if there are anything that we are doing illegally, I would like to know too, so I can flag it up to the other owners.
Many thanks in advance.
