# oppression of a shareholder



## dove2 (17 Feb 2011)

I have being searching through the web looking for some answers and have come onto this form hope someone can help.

I have being a company employee from Sep 05 – Sep 06 and then made company director from Sep 06 – 01/01/09; I am a 45% shareholder in the company, which has two other directors (father & son) with shareholdings in the company of 45% & 10% 
From 01/01/09 to 31/12/09 I was made an employee without my consent as they signed the B10 form on the 03/06/2009 which was issued to the CRO with the accountant. 
I still have my shareholding in the company and B5 form to prove it.
The company assets less liabilities were worth €260,000 + March 2010

Can someone advise me if it was legal to sign me off as a director and what my share hold is worth?


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## DB74 (17 Feb 2011)

Couple of things here

There are proper procedures which must be followed to remove a director. This normally takes place at the company's AGM which must be held every year. Every shareholder and director must be given notice (21 days I think) of when and where the AGM is to take place. If the proper procedures were not followed then you may have a case to be re-instated to the Board.

In reality however you are just postponing the inevitable. As 55% of the shareholders have voted to keep you off the Board there is not a lot you can do unless there are some provisions in the Memo & Arts which allow for a director to be appointed by 45% of the voting rights of the company.

This would be highly unusual though

The other directors cannot take away your shareholding though and if they try to dilute your shareholding by issuing rights issues etc then you must be informed of these and given the same rights as other shareholders to avail of these rights issues.

As regards the value of the company, unfortunately a 45% shareholding is not really worth very much in a private company because the shares cannot realistically be sold and the directors can basically run the company to their own agenda with very little you can do about it.

One thing you can do as a 45% shareholder is insist that the company has an audit every year which would cost the company money each year.

This is about the only bargaining tool you may have to try to get the existing directors to buy your shareholding off you, which, to be honest is the best course of action for you IMO.


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## dove2 (17 Feb 2011)

Cheers thanks for that
As far as AGM went we never had one over the years.
I had an agreement with them to buy my shares which were drawn up between my accountant and the company accountant but they are not coming up with the payment.
Is there any other way around this without taking legal action, I have no problem in going legal only for the cost it may entail


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## DB74 (17 Feb 2011)

There's no real benefit in going the legal route to be re-instated as a director. The other shareholders will merely have to do it properly the second time around and you can't stop them because they own 55% of the voting rights. So you'll just end up out-of-pocket and still with no directorship.

As regards going the legal route to enforce the contract for the sale of the shares, this may be an option available to you.


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## Seagull (17 Feb 2011)

Did they pay themselves any director's fees in the period since they removed you as a director?

If you've never had an AGM, you're in breach of the companies act.


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## dove2 (17 Feb 2011)

Thanks again for all your input.
I am not looking to be reinstated as a director; I could never go back as a director with these as they wanted me out from the start. They just used and abused me until they got what they wanted and then signed me off as being a director without my knowledge.
I suppose the question I am asking; 
1). was it legal for them to sign me off as a director,
2). if I was to take a legal change against the company, would I be entitled to 45% of the company + cost and loss of earnings ect.
The company was set up in Sep 05 with no capital
Agreed to get 45% share hold in the company after one year (of extremely hard work)
Made director and share holder in Sep 06
Other 55% of share holders (father & son) signed me off as being a director March 09
Being an employee of company with full pay from Sept 05 to 31st Dec 09
No directors fees had being paid to anyone all directors were / are employees of the company
We had one AGM while I was a director.
I can look back now and see what was going on; they used me to build the company and when they no longer required my services they pushed me aside.


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## Niall M (21 Feb 2011)

*I can look back now and see what was going on; they used me to build the company and when they no longer required my services they pushed me aside. *

Hi there, just a thought. you were given 45% of a company after 1 year. That sounds generous to me. 
You are still a 45% shareholder so any value of the company you still have 45% of it.


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## Paddy199 (21 Feb 2011)

To remove an individual without their approval would require it to be in the Memo and Arts. These state when and how a director can be removed - they usually state that if a director is not performing their duties a board can remove them by calling a directors meeting. From what you are saying, the performance of your duties is not an issue here. And no minutes would be available either.

You can take 2 apporaches here now.

1. Request an EGM via the secretary and discuss it with them. Inform the other directors that they have acted outside their fiduicary duties and you will take legal action for compensation for loss of office. They may offer to buy out your 45% stake. Failing this, use your muscle with this 45% stake by calling a directors meeting via the secretary etc (hopefully one of them can't attend) and you can make real decisions at this meeting with your 45%. 
2. Play Hardball - Call a directors meeting and ask to be reinstated immediately. If they refuse, ask them the reason for dismissal. You could possibly take legal action for unfair dismissal. Remember as a director you are an employee. You can also contact CRO and inform them that the B10 was lodged without your approval and you wish for it to be removed. Notify the other directors of this action. Keep attending directors meetings, etc. If a major decision is being made, they will need to call and agree this at a directors meeting. If they don't you can claim they are acting outside their fiduciary duties and take action.

I would be calling for an audit and watch the figures very carefully from now on. The guys may have big plans and want you out. I wouldn't settle (for now) but I would make life a living hell for them by trying to call meetings etc.

I would be reluctant to take legal action for oppression of minority interest - its very difficult to prove as they can always argue that they were acting in the best interest of the company.

Consider the mediation route. New rules here. If you request mediation and they refuse it, it goes ahead and they are stuck with 100% of the costs.

The company has real value, I can't understand your reluctance to seek professional advice. It may cost money but I wouldn't like to think I let them away lightly.


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