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Director/Company Secretary & shadow director/shareholder (A) wished to leave Ltd. company. The propasals they put forward were un-acceptable to the other Director & shareholder/shadow director(B). They said that they would take advice.
(A) went ahead with their proposals and formed a new company of a similar name. They started trading within the same premises as the original company. and tooking on existing customers. This was discovered by accident as (B) found an e mail asking one of the clients to make payment to a different bank account.
When challenged (A) stated that as a 50% shareholder he was entitled to 50% of the business, machinery etc. and that he would come to an arrangement regarding rent etc. (which never happened).
What I would like to know is:
1) Is the Director/Company secretary guilty of a conflict of interest between the two companies and also guilty of fraud in that the new company name implies that it is part of the original company.
2)Is the Shadow director guilty of the same offences as the director/company secretary.
How can they be removed from the board of the original company as they state that if any action is taken against them they will shut the original company down.
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1. Written by ndhart, on 08-05-2009 13:52
I doubt if you have 2 shadow directors in opposition to each other - that runs contrary to the concept of a shadow director (one who controls a company though not on its board). What you really have is deadlock, which can only be resolved by the courts unless otherwise provided for in the articles or a shareholders agreement.
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