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Does this still apply when the company is dormant?

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    Does this still apply when the company is dormant?

    Hello,

    A friend of mine and myself have registered a limited company around 4 years ago. We created an app, that didn't particularly succeed. But we believe the idea behind is still worth something. We had a lot of ups and downs due to the many deadlocks we were facing. The 50:50 equity didn't help here at all to break the deadlock.

    Two years ago we finally agreed to make the company dormant and have filed for it. We thought we could verify the options for a revival behind the scenes. Another two years in, we finally believe it is best to break up due to disagreements how to proceed. Bad teamwork, jealousy, and powerplay ruin the partnership.

    He literally refuses now to collaborate with the team and wants it his way. And effectively he wants it to stop if it doesn't go his way. Ideally, I would like to continue on my own. But now he throws this at me: https://www.pinsentmasons.com/pdf/compsact20060708.pdf

    He says we can’t work on another tracking app without splitting/selling/closing our company.

    Our company is already dormant though, does the Director’s Duty to Avoid Conflicts of Interest still in place if the company were dormant?


    Many Thanks for your advice,

    #2
    Get the company dissolved asap. You clearly both don't need it after 4 years of it being dormant and point out to him technology moves on quickly.
    "You’re just a bad memory who doesn’t know when to go away" JR

    Comment


      #3
      Originally posted by SueEllen View Post
      Get the company dissolved asap. You clearly both don't need it after 4 years of it being dormant and point out to him technology moves on quickly.
      Hi Sue,

      Thank you for your reply. The company was incorporated on 11 July 2013.

      The official final dormancy was actually filed on:

      31 Aug 2016 Accounts for a dormant company made up to 31 July 2016

      I have suggested to dissolve it but he says dissolving requires 75% shareholder approval.

      I'm now in a limbo state and don't know what to do. With his 50% shares, he clearly has put a halt to the progress of the product development due to false pride and has violated his responsibilities as a director. And yet he doesn't let me build this business on my own under a different name.

      From a legal perspective, I would like to know if I could do anything considering his violation of his responsibilities as a director and force a shutdown of the company, alternatively, I could sell my shares for a small sum of 5k to him. Any advice on this? The company has no revenue at this time and is dormant.

      Alternatively, can you recommend a lawyer to help me with this, please?
      Many Thanks
      Last edited by houmie; 2 May 2017, 06:17.

      Comment


        #4
        Resign your directorship. That way the conflict of interest goes away. There may be a time limit to that (check your directors contract). Retain the shares though to prevent him using the company.
        See You Next Tuesday

        Comment


          #5
          You should also check your director contracts for intellectual property ownership. As for a lawyer. Pick a well known commercial firm. They should all be about the same and they are likely to charge you a few grand to write a couple of letters that will make this go away.
          See You Next Tuesday

          Comment


            #6
            Sounds like a "I went into business with a friend and it all went wrong" story.

            As said, resign as a director then the company is his problem and you don't have to worry about a conflict of interest.

            But assuming the IP is owned by the company, then obviously if you developed something on your own based on it you'd expect to be sued. So you should probably try and find a way of settling: offer him some money or agree to pay a licence fee perhaps.
            Will work inside IR35. Or for food.

            Comment

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