Problem Member

[Gladys]

Hi there,

I need urgent advice please. I am 70% owner of a cc that I share with my ex-husband. He has been a non-contributing member for the last 3 years, but draws funds from the company account at leisure. What are my options, as majority shareholder in terms of legally ousting him from the business? He will not sell his interest. Please help.

[BusFact]

If he does not want to sell I don't know of any way to force him.

1) You need to negotiate a payment deal that will encourage him to sell.
or
2) Stop trading in this cc and start up a second cc as a 100% member.

[Dave A]

but draws funds from the company account at leisure.

A few options to do immediately:

• Change the signatories for the bank account, or
• Close the bank account and open a new one at a different bank.

From there-

What you need is leverage:

If they are unauthorised withdrawals (not done in accordance with the resolutions of the members) or money he is not entitled to, you could commence legal action to recover the misappropriated funds.

The cc might not recover the money, but you establish grounds to have him ejected as a member.

Or you could arrive at an out-of-court settlement that achieves much the same

I'd instruct a lawyer to commence recovery of the funds...

Or close down the cc and start trading in a new one as suggested above - after pillaging every cent and asset out of the last one, of course.

[sterne.law@gmail.com]

Check out the complications in terms of what matrimonial property system you used, could bite you in the you know where.

[BusFact]

- Change the signatories for the bank account, or
- Close the bank account and open a new one at a different bank.

Won't the bank require authorisation from all members in the above situations?

[Dave A]

If there's no overdraft, I suspect they need only comply with FICA. A copy of the other members' ID, a resolution of authority to act on behalf of the cc in opening and operating a bank account and a winning smile could well cover.

The other option is to open an individual t/a business name account.

It might mean being a bit slippery, but the way I see it, the first priority is to stop the bleeding.

Then there are the really dirty tricks, but perhaps best we don't go there.

[flaker]

quickie

whilst you deliberate, and understand bank requirements/signatories etc.,immediately stop making deposits into that a/c. if it has o/draft facilities issue cheques in your favor to let account b drawn to the hilt.note all withdrawals etc. in case of litigation which am sure will b none. maintain proper books of account,again in case of future queries. On behalf of this forum (administrators please forgive me as i do not have your permission) we authorise you to draw for your goodself a salary 2X what is presently drawn by you.