Myself and some other acquaintances invested over $1m in a software business which has been operating for about 7 years. It wasn't profitable, albeit it did turn over $60k/pa in revenue from a hundred or so clients and revenue growth was ~50%/pa, so not a complete failure! The sole Director (owns >50%) has now declared the business insolvent and sold the intellectual property (ie. computer code) to his other business for the debts the company owed (around $250k).
My question is, during the administration process, is there any legal obligations on the director to receive an independent valuation for the business being sold? Selling a business at $0 (or less than zero) and then continuing to operate it from another related entity sounds like fraud to me?!
My question is, during the administration process, is there any legal obligations on the director to receive an independent valuation for the business being sold? Selling a business at $0 (or less than zero) and then continuing to operate it from another related entity sounds like fraud to me?!
