Have you been wrongfully removed as a director or shareholder of a company?
Being removed without proper cause as a director, shareholder (or both) from Companies House' records is more common than you might think.
A change to the officers or shareholdings of a private limited company cannot occur without compliance with various statutory and constitutional procedures. However, as Companies House is not policed as such, anyone that has the company's Company House login credentials can quite easily make online filings and change Company records. Even though this only technically changes the public register, if you are removed from Companies House records, this will likely prevent any third-party entities for example, banks and customers of the company etc, from dealing with you. In these circumstances the only remedy may be recourse to the court (Companies House provides very limited assistance in such scenarios and usually tend to avoid involvement in a disputed removal of a member without consent).
Falsified Companies House filings either by an officer, former officer or a party that has some connection to the company may amount to a serious fraud. Often, the motive behind such wrongdoing is to dissipate or divert company assets (perhaps to a third party in an attempt to conceal a transfer for no consideration).
If this is a situation you find yourself in and the wrongdoer has ignored your demand to withdraw the filing and restore you to the records at Companies House (provided their identity is known), you may need to consider seeking urgent injunctive relief from the Court, including possibly a freezing injunction to protect company funds. In some circumstances, this will be too late and you will need to consider a claim for damages against the wrongdoer.
Such proceedings can be complex, particularly as a claim may initially vest in the company rather than (or as well as) an aggrieved director. It may be necessary to seek an order requiring one party to be bought out by the other, or for one party (or the company) to buy out the other, especially if the dispute is between two members and there is a relationship breakdown.
In the event that you are unaware who the wrongdoer is, and a company asset is dissipated from the company without your knowledge, such information may be discoverable either through an asset/money trace investigation or by seeking a Norwich Pharmacal Order. A Norwich Pharmacal order can require a third party (e.g. a bank) to deliver up information regarding the account used to receive or dissipate the proceeds of the fraud.
Alternatively, if you are shareholder of the company and you suffer an unfair prejudice and damage is caused to your shareholding because of the above scenario or any other prejudicial action that has taken place, you can issue an unfair prejudice petition to court seeking damages for any such prejudice and the losses resulting.
Articles are intended as an introduction to the topic and do not constitute legal advice.