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Ourmaninthenorth is right, lots of garbage being spouted here esp from hora
There doesnt appear to be anything illegal going on from the description given, but the devil will be in the detail.
Everyone may be perfectly fine with these arrangements, but then again they may not. You need to decide if its worth rocking the boat about, because if these arrangements are agreed with all the shareholders, you'll probably very quickly find yourself out on your ear.
If they dont know, then theyll probably be very grateful. Tough posiion to be in. Can you have an informal chat with the friendlest shareholder and work out which way the wing is blowing
There are many assumptions made by the OP. The MD could be informing the shareholders of the extra payments and if the company is making a good profit and the shareholders getting dividends paid they might not care.
Also a lot depends on the size (turnover/profit) of the company in relation to the payments he's making to himself. A lot of assumptions. The OP obviously doesn't like the MD and that can sometimes lead to assumptions.
I'd tread very carefully without full knowledge. There are more privately held companies work like this than you'd think. I know plenty.
Are there any other Directors othern than you and your Boss ? If so, what are their opinions ? If the other Director's feel the same as you, raising it at the next board meeting would be a good start.
The OP sounds like a non exec director? So maybe doesn't attend board meetings?
I'd also check that your Director liability insurance is up to date.....
pretty much this exact thing happened to my dad's old company. the boss ended up ****ing the business, making about 200 people redundant, took their pension contributions, investigated for fraud and went missing.
nice.
Hire a duck expect to hear a quack? I offered an opinion based on common sense. I never said I was Julian S Minshire, Ace Lawyer to the Stars..
The company is solvent and profitable.
Then what exactly is the problem here?
Surely the directors' emoluments are decided by the board, including the OP, as are the dividends payed to shareholders.
Loans to directors are perfectly legal, as is paying the missus for doing sweet FA.
If the auditors are happy the company is a going concern and not being defrauded, then what's the problem? Is it a moral question- that not all staff are sharing in the fruits of their labour?
...or envy by the OP?
The question is, is the OP really a director at all? If he is, then he, and the other directors, have the power to decide how the company spends it's loot. It cannot be decided by the MD alone.
My first thoughts were to say suck it up buttercup & that's life, but having just re-read the first post & picked up on the fact that the chairman & major shareholder has dementia. I can see that the minor shareholders may just be happy to receive dividends, but would i be correct in assuming that said dividends aren't as big as they should be because MD is overpaying himself in various ways but the chairman is not aware of what is going on?
I think you need to ascertain how aware the other shareholders including the chairman or his dependents are of the situation, after seeking legal advice.
Tell his wife about the affairs.
[url= https://www.gov.uk/whistleblowing/overview ]Have a look at this[/url]
tonyg2003 - Member
The OP sounds like a non exec director? So maybe doesn't attend board meetings?
Eh, thats essentially "all" that a non-exec director does! Basically a non-exec is a director who is not employed full time by the company and is there to ensure good governance of the business!
but having just re-read the first post & picked up on the fact that the chairman & major shareholder has dementia.
Is he mentally able to hold the position of Chairman? If not, does someone hold Power of Attorney over his affairs and do they appear to be acting in his best interests? Might they have a connection to the MD? If so, it could very well be fraud or theft.
Before getting carried away, if he is overpaying himself then the shareholders are the ones losing out. The first question - are they aware of how much is being paid out and loaned to him? They should, unless it is a small company for Companies Act purposes, which sounds unlikely, as this will require disclosure in the financial statements. The highest paid director's emoluments have to be disclosed which would mean it should be clear how much he is taking out.If this has not been done, you, the Board, are collectively responsible for the financial statements. Loans also need to be disclosed. Therefore the accounts are your first port of call. If you find interpreting accounts difficult, then either get some training or reconsider whether you are comfortable with having a director's responsibilities.
If you are uncomfortable with the disclosure in the accounts then you need to consider the next best steps. However, get the facts first.
Pcaw.org.UK may be useful for some free legal advice
A lot of the advice here is indeed laughable, and one or two of the usual suspects are excelling themselves.
But I have 2 thoughts.
1) If the MD were to start up on his own, would his company be as successful and what would happen to the shareholders of this company? I guess they would be left with nothing.
2) Have you considered blackmail?
He is not doing anything illegal, but I do feel he is acting immorally.
Wake up smell, the coffee and welcome to the world of capitalism.I'm sure you're being well compensated to get through this moral dilemma.....or maybe not enough?
I work for a not dissimilar company and although I'm satisfied that nowadays eveything is run correctly, it wasn't always the case and when the founder was alive and functioning as Chairman 20 years ago there were some truly odd and slightly worrying thigs going on amongst his family and the directors. One director who saw himself as the inheritor overstepped the mark even for the Chairman, who sacked him. There's history there that would fill a decent-sized book but I would NEVER dare bring it up in any way, people are just too sensitive about this kind of thing. When the company was much smaller and less transparent in the way it was run that was the culture and any attempt to challenge it would have resulted in instant dismissal, I'm sure. Many of us benefited; the Chairman had a love-nest in a posh block in Chelsea and a few of us had keys and permission to use it for weekends in Town.
So as others have advised, handle with kid gloves and be very sure of your ground before challenging the bloke as you have no idea what private agreements are in place or what history exists.
the Chairman had a love-nest in a posh block in Chelsea and a few of us had keys and permission to use it
😯
Just the flat, or the contents too?
I would not be posting on here in the first instance and secondly I would be making an appointment with your solicitor first thing in the morning. There sounds like things that would be of interest to HMRC here. You are an officer of this company and your first duty is to the shareholders collectively and not you own self interest that appears to be your main concern.
Are you a Company Director with fiduciary responsibilities?
If so, you need to review the Shareholder's agreement/ Reserved Matters table & take action I think. (You will incur personal liability if you don't)
If you are not a Company Director I'd suggest you track down the Shareholders & dob the **** in.
If he disappears with the money, and then the company goes under, what position will you be in bearing in mind that you knew that this was going on?