Directors Reinstated & Corporate Control Recovered
30.05.2025
Co-author: Iryna Aleksieieva.
Client Background:
Our firm was instructed by two majority shareholders, who collectively held 67% of the shares in a private limited company. They had been wrongfully removed as directors and unlawfully excluded from the company’s bank accounts. Meanwhile, the minority shareholder sought to seize control by forming a new entity with a similar name, attempting to register the company’s intellectual property and brand as their own.
Issue:
The opposing party’s actions were unlawful and posed a direct threat to our clients’ corporate interests, including the potential misappropriation of valuable assets and intellectual property.
Actions Taken:
- Detailed Assessment & Legal Advice:
Upon instruction, we swiftly conducted a thorough assessment of the situation. We outlined our clients’ legal rights and strategic options, advising them on the most effective action.
- Pre-Action Protocol Letter:
A Pre-Action Protocol Letter was prepared, outlining the factual circumstances, legal breaches under the Companies Act 2006, and everyday law duties owed to shareholders and directors. This document was a formal notice to the opposing party, asserting our clients’ rights.
- Swift Negotiations:
Our intervention initiated negotiations promptly, leading to a favorable settlement. Our clients’ control over the company was fully reinstated, and the opposing party formally agreed to relinquish all involvement in the company’s affairs, ceasing all attempts to misappropriate assets or intellectual property.
Outcome:
- Full Reinstatement: Our clients regained complete control and management of the company.
- Protection of Assets: The company’s assets and intellectual property were safeguarded from further misappropriation.
- Resolution Without Litigation: The dispute was successfully resolved without needing court proceedings.
If you’re facing a dispute over corporate control or shareholder rights or need advice on protecting your company’s assets, Sterling Law’s expert team is here to guide you. Contact us today to discuss how we can help safeguard your business and resolve legal challenges effectively.
