Removing a Shareholder from limited company procedure

Zai

Hi All, 
Apologies first time poster but regular boards user. I own a limited company with two shareholders each holding one share, wanting to remove one shareholder and replace him with another person, Could somebody advice should we be applying to remove this shareholders share (1 share) from the company, or get him to transfer the share to the other shareholder? The company has been registered for the past 11 years but is not trading yet, however hoping to start trade with a new business idea in the new months, thus wanting to get all these issues sorted beforehand. 
Many Thanks for reading and responses.

Get some professional advice.
The new companies act came into force last year and it might be worth reviewing the structure of the company at the same time edit: before starting your new business.

Gloomtastic!

Registered for 11 years but not trading yet! Is this a record? :rolleyes:

Why not start a new company and forget about the old one? It would probably cost the same and you'd have no issues with the unwanted director. Is there a reason you want to keep the old company?

ebbsy

Gloomtastic! wrote: »

Registered for 11 years but not trading yet! Is this a record? :rolleyes:

Why not start a new company and forget about the old one? It would probably cost the same and you'd have no issues with the unwanted director. Is there a reason you want to keep the old company?

Good advice.

SeanSouth

Its a very simple matter for the old shareholder to sell his or her shareholding to an incoming shareholder for a nominal amount. You will get the required form on the CRO website.

I strongly disagree that its better to start a new company. You then have the additional expense and inconvenience of closing down the first company.

Sean South

thegolfer

Transfer the share into the new holders name.

Pay a nominal fee, assuming it was €1 per share, then pay one for one.

No stamp duty as the value of the shares is below €1000.
Though complete transfer documnetation for SD purposes.

Complete the resolutions to transfer the shares, at directors meeting.

Cancel old share certs, issue new share certs, in new shareholders name.

Elect or nominate new director, file B10 with cro.

Next B1, record the transfers and new shareholders, file with cro.

All in about 1 hour to complete, assuming you have the documentation.

pedroeibar1

SeanSouth wrote: »

I strongly disagree that its better to start a new company. You then have the additional expense and inconvenience of closing down the first company. Sean South

thegolfer wrote: »

Transfer the share into the new holders name.......All in about 1 hour to complete, assuming you have the documentation.

The OP is a classic homework question on Corp Law/Governance (I wonder is it?) The issue is not as ‘black & white’ as the above two posts suggest.

The fact that the co has been in existence for a dozen years does have an influence on its membership, even though it has been dormant. Two director/shareholders want to get rid of Mr.Third, another director/shareholder.

Answers to resolve –
We do not know if Mr. Third is willing to relinquish his role, or if he wants to remain, or if he is entitled to or wants to be a part of the newco.
We do not know the terms of the agreement (if any) between the three original director/shareholders. (“We agree that we will pool our skills and develop a business together.”)
We do not know if the business activity planned for the ‘newco’ is in the same/similar sector as the dormant company (which has now a LTD. co with a wide scope of operation). Those are just a few of the questions that need answers.

Simply presenting Mr Third with a resignation form etc. is IMO quite likely the pathway to an action for oppression of a minority shareholder. Just sayin…….