Shareholders – FAQ’s answered
What if shareholders are not happy with the behaviour of the directors?
- make your views known to the directors
- if this fails shareholders may consider taking legal action in a serious situation
Is it possible for shareholders to dismiss a director?
- Shareholders are entitled to vote on the appointment of new directors and also on the re-appointment of directors who wish to be re-elected. It is possible therefore to vote against the re-appointment of directors who make unpopular decisions. If shareholders represent at least 10% of the company’s voting rights (and 5% in some circumstances) they can require the board to hold a general meeting to consider dismissing a director.
What decisions do directors need shareholder approval for?
- unless specified in the articles of association the decisions requiring shareholder approval are :
- appointment of auditors or reporting accountants
- appointment or re-appointment of directors
- adoption of the annual accounts and reports of the directors and auditors declaration of dividends
- approval of property transactions involving the directors
- changes to the company’s articles of association
- voluntary liquidation
- increasing the share capital and giving authority to the directors to issue the shares
Can I sell my shares to anyone?
- This depends on the company’s articles of association and any other agreement you may have
What happens if I die?
- You can protect your fellow shareholders, loved ones and the company by having an option agreement which allows the shares to be bought by the shareholders at a pre-arranged price. Otherwise, by default, shares would pass under a will or under the laws of intestacy
For a free initial chat, please call 01202 499255 and Matthew or a member of his team will be happy to discuss any questions that you may have.