what if BP's investment WAS to buy shares?

[mrs_spacey]

I think Si Pie mentioned that you don't need to have paperwork on loans (if they have no repayment terms built in) to a business because the Article of Association for the business should have a section on how Director loans are treated.

Well, if I was in the position of chucking 1.2 million into a club, I would want the terms of it signed and whitnessed, carved into a stone tablet and sealed in a bank vault in Switzerland. There would be no grey (Gray?) areas. That's all I will say about it :shock:

Yes but you're not loaning to a person, you're loaning to a company, which is a separate legal entity in its own right. You can't get a company to sign because it's obviously not a physical being and because BP was/became a director due to this investment, it's treated as a balance to a director. Unless of course it's shares.

That's fascinating :shock:

So what you're saying is

Companies can't have any sort of agreement or contract or anything at all that requires a signature because companies don't have hands and can't hold pens; and

If you lend money to a company - that makes you a director...cool...I'll lend Barclays £10 (without a loan agreement of course - see above re lack of hands), then I will be a director.  

Oh no - I just had a thought, who's gonna sign the company accounts if the company has no hands?

Quick sipie get your textbook out again!

[SwindonTartanArmy]

Si Pie, thats nonsense. A company would have a list of authorised signatories.

[red macca]

You do not need documentation to prove it is a loan in a court of law.


Any investment made if there are no share certificates/documentation to back it up automatically defaults and is treated as a loan.Thats the law

I understand this bit i really do.What i dont understand is why bp did not insist that they sign a legal contract between themselves to cover this situation.

[Samdy Gray]

You do not need documentation to prove it is a loan in a court of law.


Any investment made if there are no share certificates/documentation to back it up automatically defaults and is treated as a loan.Thats the law

I understand this bit i really do.What i dont understand is why bp did not insist that they sign a legal contract between themselves to cover this situation.

Perhaps he:

1) Never thought the situation would be like this

2) Knows his legal stuff better than Micky D therefore knew it would stand up in Court if it ever came to that, and didn't request anything in writing.

[red macca]

You do not need documentation to prove it is a loan in a court of law.


Any investment made if there are no share certificates/documentation to back it up automatically defaults and is treated as a loan.Thats the law

I understand this bit i really do.What i dont understand is why bp did not insist that they sign a legal contract between themselves to cover this situation.

Perhaps he:

1) Never thought the situation would be like this

2) Knows his legal stuff better than Micky D therefore knew it would stand up in Court if it ever came to that, and didn't request anything in writing.

Sam its £1.2m mate that is a big gamble..Surely you can see where im coming from

[Ralphy]

Has anyone thought about the fact that our board may make wrong decisions but i very much doubt they are stupid.

Why would they lie in the public eye reguarding Bill Powers investment? They must have a case else they wouldn't have posted that statement. If they are willing to take legal action, they must be confident.

What if, like the thread title says, Bill Power's investment WAS shares and NOT a loan?

[DV]

didnt they already admit it was a loan?

[red macca]

Has anyone thought about the fact that our board may make wrong decisions but i very much doubt they are stupid.

Why would they lie in the public eye reguarding Bill Powers investment? They must have a case else they wouldn't have posted that statement. If they are willing to take legal action, they must be confident.

What if, like the thread title says, Bill Power's investment WAS shares and NOT a loan?

To be fair ralphy i think they are stupid and they fucked up at the last court case they had.

I dont doubt for 1 minute that it was a loan its just the failure to get a seperate agreement signed that baffles me

[Ralphy]

Fair enough.

[Samdy Gray]

I dont doubt for 1 minute that it was a loan its just the failure to get a seperate agreement signed that baffles me

Considering the amount of money involved you would have thought Bill would have requested something, but going on Samdy's admin skills it's probably still on her to-do list.

[Phil_S]

Just a thought. This new Investor the board are supposedly courting. If they are looking at giving him shares for his investment wouldn't it mess up their calculations if they didn't know if Billp's money was for shares or a loan. I mean they could accidentally sign over more than 50% of the company. We all know that maths isn't their strong point.

[Panda Paws]

You do not need documentation to prove it is a loan in a court of law.


Any investment made if there are no share certificates/documentation to back it up automatically defaults and is treated as a loan.Thats the law

I understand this bit i really do.What i dont understand is why bp did not insist that they sign a legal contract between themselves to cover this situation.

Perhaps he:

1) Never thought the situation would be like this

2) Knows his legal stuff better than Micky D therefore knew it would stand up in Court if it ever came to that, and didn't request anything in writing.

This is what i don't understand. Surely you don't just write a cheque for 1.2 million quid? there must be some kind off acknowledgment of receipt or something??

[Zurich Red]

Looking back in the archives I see that Mark D once said that BP put in £500k in Feb and an additional amount in June/July

http://www.thetownend.com/forum/viewtopic.php?t=16292&postdays=0&postorder=asc&start=26

I suppose it's possible that the board admits the original £500k is a loan - hence the "derisory offer" but the nature of the second amount was still being sorting out when the crash happened. In BP's absence the board may have gone ahead and treated it as a share purchase although he would have prefered it to be a loan.

[RobertT]

still doesn't match the figures they use.  £500k for 23%, you could have total control for £1.1m, or just another 600k if you had that first batch.

[Simon Pieman]

Si Pie, thats nonsense. A company would have a list of authorised signatories.

You don't normally sign agreements to accept money. It would be like signing to get your monthly salary and you wouldn't need to sign an agreement to pay it back if it didn't deviate from the usual director's loan terms.

But yeah, I'm wrong. The courts will say if no shares were bought it wasn't a loan because he didn't sign a loan agreement.