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Legal recourse in Ltd company against director / ownership of IP and website

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  • Legal recourse in Ltd company against director / ownership of IP and website

    Hopefully someone can help with a bit of a tricky issue.

    Myself and two other people set up a website and created a limited company of which all three of us were directors with an equal 1/3 share split each. The site is an unpaid journalism site, and we have a number of other volunteer writers as well as writing ourselves.

    Recently one of the directors submitted an article for proofing which contained content taken from another site directly. Fortunately, I caught this before it was published, and myself and the third director confronted him about it. He shrugged it off as a non-event, but we emphasised that this could have placed the entire site and our business in jeopardy.

    He then decided that the site was far too much hassle to continue with and said he was going to step away.

    He has offered to transfer over what we need, but I am a little suspicious that he will not be that easy-going and this may drag on.

    Here are the issues we have:

    - The site was purchased by him (along with the physical hosting). It was not purchased through the company. We all split the costs, and we have proof of payment to him of this.
    - The domain was registered and paid for by him, and again we split the cost and paid him.
    - The ongoing cost of the site hosting is paid by him monthly (he has a credit card on file at the provider), but we have paid upfront for the year (until Jul 2019). If he removes the card and refuses to pay us back, we may just have to take it on the chin.
    - The Ltd. company was registered by him at Companies House though we are all listed as directors.

    My main concern is that he will want to retain his shares in the company despite not being interested in going forward with it any more. If the site becomes successful, he will presumably be entitled to a third of any profits/dividends/company sale, which is far from ideal. Also, I'm unsure who legally owns the website. We all split the cost equally, but since the site wasn't purchased with any company money and since he will not be paying hosting or domain name costs going forward, does that mean myself and the other remaining director have a better legal footing for ownership?

    Furthermore, given his action in plagiarising could be construed as potentially harming the business, does this also put us in a better position?

    Essentially, we want him removed as a director and his shares taken away, and while he may agree to the first, we're unsure if he will agree to the second. If this happens, would dissolving the company make this easier - and if so, the question still remains as to who owns the website.

    It's a bit of a tangled mess, so any assistance here would be appreciated!

    Tags: None

  • #2
    Is this a .co.uk domain? Is it apparent that it is for the limited company? If it is then you may be able to contact nominet.uk, explain the situation and transfer the registration of the domain to the company. Have a look here, you may gain heart

    I've found Nominet to be very helpful at times like this, though some of the hosting companies are not. Once you have the domain transferred to the company then the hosting companies will be forced to deal with the company as owner of the domain. They will shout and scream and ask for silly items of proof but you should get there. Been through this 3 times in the last 6 months.

    For the shares. Did you each get 1 share each? If you did then if you have problems then allocate the remaining shares between you to water down the effects of his share.

    As you have 2 directors working together then by a majority you agree to remove the other director and send in the ofrms to companies house.


    • #3
      Thanks for the quick reply!

      The company was set up with 33 shares each (99 in total). So I'm also not sure what to do in this situation either. I don't think him stepping down as a director would be an issue - but I don't think he'd relinquish his shares, so I'm just seeing if I can find out what our options are in that situation.

      The name of the company and the name of the site are not the same unfortunately, but we have both the .com and .co.uk domains. I don't think the issue is about keeping hold of the domain since I believe he will transfer that over. It is more about who "owns" that domain if the company got dissolved (and even if it didn't). This is what I'm struggling with.


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