It sounds to me like neither of you is blameless. I don't buy the "every thing was going along nicely until I recently found out that the loan a/c dd had bounced and we were almost €5k overdrawn" line. Did this happen overnight? When was the last board meeting convened? When were the last set of management accounts compiled and reviewed in detail?
We only started trading in June and hadn't gone through detailed accounts yet (the web admin panel shows sales figures which kept me happy - never thought this would happen to be fair). This has only come to light in the past month, admittedly I took my eye off the ball but I've taken the credit card from him and all cheques have now to be countersigned.
. Could you list what is loan amount/ repayment amount and lenght? €10k, €189 per month over 5 years
. What is visa card Limit? €6k (cleared each month via DD
. What is overdraft Limit? and balance of to-day. €3.5k (€4.6k o/d at present)
. How much are personal guarantee to bank each or are they joint:Joint guarantee for €10k business loan
.Do a spreadsheet of bank account and visa card from June to now.
.Allocate all expenses into various headings.
.Get how much other director took.
. If you know how much he took, decide is any of this wages, funds introduced, repayment of director loan etc
. Have you actually agreed a wage amount for other director.
. Balance left- Ask him how is he going to repay it.
If he has to use overdraft/credit card maybe the company has some cashflow problems or needs injection of funds from both directors.
Are all taxes up to date?
Unfortunately as a proprietary director you cannot "just walk away from it" as there are plenty of authorities who will remind you of your obligations. I feel you have no option but to sort the business out by taking up a more active role and the price for that is the other shareholder surrenders their share of the equity, discharges the debt they have accumulated and then resigns as a director.
Thanks, I think I'll be taking your advice and insist that he resigns. Is this a straightforward process (once he agrees to it)? i.e. transfer of shares, resignation etc.
What if he refuses?
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