Advice on business failure due to 3rd partner

[CLIVE-TRIANGLE]

To both Clive & Dave: what is the approx cost of a voluntary liquidation? Does a directors meeting be required to vote for same and if this be the case, then does the majority vote count?

Voluntary liquidation with limited or no 3rd party creditors, my fella charges R9500 + VAT. It also depends to an extent on what assets there are. Like everything, this is an industry on it's own and the competition is fierce Liquidators basically get 10% of liquidated assets, before settling any liabilities. If there are no assets no liquidator will take it on, unless there is a minimum up front payment.

It requires a special resolution, so the requirement will be in the MOI and is more than likely 2/3 majority. Caution is advised, because a dissenting director means one with issues. But it sometimes happens that he is merely absent.

[CLIVE-TRIANGLE]

So could we just resign as directors (& shareholders?) pack our stuff and leave with a "Thanks for nothing" mentality? If he manages to build a case against either of us and get it to court to try get us to settle his loan account personally, we'll deal with that then. That will obviously be a hugely costly exercise with no guaranteed result.

You can of course resign as director any time you want. You cannot resign as a shareholder, but you can donate your shares to Bob. Remember that if there are shareholders who are not directors, then the company is no longer owner managed and requires audited afs.

Having said that, I don't see that you are exposed to additional risk if you don't resign, on the contrary until you fellows have formally resolved the type of dissolution you all find agreeable, you might put yourself at risk by resigning.

Unless you and your friend are guilty of some kind of misappropriation, he has no claim against you. Nor you against him, unless he has done something dodgy.

The remaining portion of the lease can be an issue. I am not sure that the landlord can hold the company liable if it is in Bob's name... to be frank it's his problem, I would think.

[Justloadit]

I disagree on not resigning as a director. Simply put, if you start another company or even start a job in the same realm as the current business, which it seems you wish to do in one of your previous posts, it may be seen as disregarding a director's fiduciary duties in that you are engaging in a similar business that you are currently in, and may be contravening against the company in which you are a director by using the current company's IP to do your new duties. To do this the correct way, you require all the directors consent in writing, and to be quite frank, the current situation it may not happen. IMHO resignation, frees you to do this.