Hi I wonder if someone could help me please. My husband and i currently own 50% shares in a ltd company with my brother, who also owns 50%. Our shares were listed as 25% each, just in case we split so my husband could retain his 25% share. Our relationship with my brother has irreversibaly broken down, and he has offered to buy our 50% shares, but can only afford to do so in two installments of 25% over two months. He has insisted that on receipt of the first installment, that we sign a transfer of the first 25% to him.

Firstly I am concerned that if we sign and transfer the first 25% shares after the first installment, we have then lost control over what happens next, as he becomes the majority shareholder. Can we insist on holding on to this document until he has paid the second half? as it is not our fault that he can not afford to pay us in one lump sum for the full 50%.

Any advise would be great, as we don't trust his motives.
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As a 75% shareholder your brother might be able to pass special resolutions without you necessarily consenting.

The company’s memorandum and articles of association would determine what actions could be taken. For example, whether pre-emption rights exist to prevent the dilution of your holding by him issuing additional shares to himself.

I am not a legal expert, but some sort of signed agreement that stated that a contract exists for the purchase both lots of shares and that unless the full arrangement is concluded; the whole contract is null and void might offer you some protection.

Perhaps others with greater legal expertise could confirm this point.
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You would deal with this in an agreement and the planned 2 stage transfer based on payment would also normally require amendment to the articles. If you want a quote for this work just email quotes@limeone.co.uk for the quote and also further information.
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Or say 'hey, bro, it's OK, we'll wait the two months and then you can buy us out together' or have I missed a really massive point here? :|
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Thanks for your advice, the situation is a lot more complicated than it seems, I will try to explain as shortly as possible. In Aug 06 we handed over a chq for ?0,000 as paymnet for 1/2 a lease on the property. Unbeknown to us we did not then own this property until jun 07. My brother has several other companies all cic's which are gov funded. My husband started work for him in Apr 07 on a salary, at one of his other companies. We sold our house in Jun 07 and moved accross the country to set up this new business with him. In jul 07 I started working for him at the same company as my husband because the refurb to our new business. This company had no connection to our new business. At this point my brother told us that the way we would get paid was changing, instead of my husband receiving his usual salary he and I would get paid our tax code as wages, and receive a dividend to top it up. It was calculated by ading our two salaries together, deducting the amount we would get from our tax code and then splitting the remainder in half, thus determining our dividend. we were not happy to paid this way, as we questioned being paid dividends when the company was not even up and running. We were told that this was standard business practise. We continued to work for this copny and get paid in this way until Jan 08, when the companyclosed and went in to voluntary administration. At this point my brotherofferred my husband a job in a different company for the same salary as he used to receive, this was because we both said we were not happy being paid like this and wanted to go on paye. My husband was never laid off from any jobs he had with my brother, but in Jan 08 we both only receives our tax code wages and nothing more. We have good reason to beleive that my brother has used funds from his other business' to fund the refurb and equipping fo our new business, and that information has been held back from us. We have received only a partially completed lease document, and articles of association. We went in to this business based on trust, but feel that we have been somewhat naive. We could not continue to start this business as we feel that something very dodgy is going on. We are being held over a barrel as my brother is threatening to sack my husband if we seek legal advice on our position which we find strange as we feel it is our right to do so. And he has opened the business without our consent, and is now trading and making decisions without our knowledge, but is threatening to land us with a bill for 50% of its liabilities, if we pressure him to make the two payments for our 50% shares.
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