Building up a successful company with your partner is similar to getting a marriage, often easy to getting together, difficult at the time of separation. When the time arrived, all you want is to minimize the damage to the business.
In this article, we will share some preparation works at the early stage to avoid dead lock when the relationship turns sour and reclaim the control of the company.
Retirement or rotation scheme
Although if you are the majority shareholder, you can remove the director by special resolution, this rough and direct arrangement might cause certain unrecoverable damage to the people being affected and also to the company.
There is a mandatory requirement for Hong Kong Company to hold Annual General Meeting (AGM) once per year. This would be a good practice to set out the retirement rules in the Articles of Association of the Company to retire and re-appoint the Directors every year during AGM, so that the Shareholders (Members) can bring up the idea for a Director to retire naturally, rather than to terminate the relationship at an undesirable moment.
Appoint yourself as Chairman of the Board