Hi Guys, im after any one who has any working knowledge of the rules regarding the above, specifically, if a member of the board, or the CEO/Chairman/Chief Exec has a substantial amount of the company's shares (5% equalling 750,000 shares) When the company goes in administration is that Board Member liable in any way to the company for those shares, in any way

 

simples....

 

Rich

This may shed some light Rich assuming its a limited company of course

 

The company is a separate legal person from its shareholders and the directors. The company incurs debts in the course of its business and only the company is liable for those. In a company limited by shares, the shareholders' obligation is to pay the company for the shares they have taken in it.

 

https://www.gov.uk/business-legal-structures/limited-company

Graham, hi. Its a suspended company on the LSE, a public limited company i think (should have mentioned that) i'll do some more digging

 

Rich

What Graham says is bang on - a limited company (whether private or public) is there to "limit the liability" of the shareholders; to the extent of the value of their shareholding.

 

All shareholdings must, at some point, become "fully paid" IE the shareholder must physically pay for them. Effectively, they buy the shares, hand over the money (by investing it into the company if they are first subscriber shares; or paying the previous shareholder, from whom they made the purchase).

 

If the company then goes into liquidation, the shareholder loses their investment; but is generally not liable for any of the company's debt. However, if the shares were not paid up at the time of the liquidation, then the shareholder would still have to pay in their investment money; in the event that there are creditors to pay.

 

Hope that helps,

 

Richard

What Richard said !! lol

 

 

Jeff