Dispute With Partners In A Limited Company

[MuayThaiGuy]

My Thai girlfriend and I are partnered with 2 other foreigners in a limited company.

The two of us wish to sell our shares (she has common shares and I have preferred shares).

She is listed as a director, as is one of the other foreigners.

Problem is, our partners are making things difficult and they are not providing us with the financial information we need.

Our accountant wants to charge us for the monthly reports, which we're willing to pay if we have too, but it seems like our partners will continue resisting and making the sale difficult for us.

Here are my questions..

1) After we obtain the financial reports and get a buyer lined up, is there any way our partners can prevent us from making the sale? I understand that common shareholders (in this case, my Thai girlfriend) have to offer to sell the shares back to the company first but that preferred shareholders (myself) have the option of selling to the highest bidder .. is that correct?

2) I do the promotion/advertising for this business. The website and the majority of the other promotional material I've developed is in my control (none of it is owned by the company). In fact, the website was registered long before the company even existed. If our partners continue to make things difficult for us and I decide to remove the promotional material (essentially cutting off their income supply), would there be any legal repercussions for doing so and what would happen if the company went bankrupt?

We don't have any outstanding debts as we've never signed for any loans. I realize we would lose any money we invested into the business, as well as the deposit on the property we're leasing .. but is there anything else we should be aware of? Also, if this company were to go bankrupt, would that somehow prevent our ability to start another company in the future (me and my girlfriend) and go into business just the two of us?

Thanks in advance.

[Sunbelt Asia]

First of all, in order for you to be able to sell your shares to a third party (parties that are currently not on your shareholders list) you would need to look into your company’s Articles of Association to make sure if it indicates the way to sell or purchase shares and how. If the bylaws do not forbid it you would then need to check whether you have entered into any kind of agreement with your partner, such as Joint Venture Agreement and/or Partnership Agreement. You must see whether the company or the agreements stipulate any kind of obligation for the shareholders in selling his/her/their shares to third party (first right of refusal).

You can send us your company affidavit, shareholder list, and articles of association to check first if you wish.

It should be noted that some company’s By-laws may not clearly state all the obligations (rules & regulations) to govern the company, but instead, it would say that they are oblige to the Civil and Commercial codes.

As you have mentioned that your wife and the other foreigner is the director of the company, my I enquire on the signatory condition for the 2 directors. Is it:

1. Your wife solely has the authority; OR

2. That foreign director solely has the authority; OR

3. Either one of the 2 (above) could sign; OR

4. Both of the directors must sign

The reason I mention this as when selling the shares, the shareholders list (MOC version) would be signed by the authorized director(s).

Regarding the website, even if you were the party who listed this website (on individual basis), but you may need to consider whether such assets were part of the contribution towards your joint venture or partnership.

[sunbelt][/sunbelt]