What happens when company directors fall out? Patrick Rawnsley explains how to prevent problems in times of dispute.

Factfile

  • The legal position of a company director is split between their role as director, shareholder and employee c When a director wants to leave a company while others wish to remain in business, a just and equitable winding-up could be applied for, which could see assets being divided equally between partners
  • The costs of winding- up a company can be high as assets could be sold for a much lower value than they are worth
  • When setting up companies the partners must consider the actions that will be taken if anything goes wrong
  • Partners must set out at the start what action will be taken against owner-managers who underperform or commit an act that may adversely affect the business

Source

Electrical and Mechanical Contractor

Postscript

Patrick Rawnsley is a corporate partner of the national law firm Eversheds.