COMPANIES are being caught out by a little-known change in accounting standards which threatens to cause bust-ups in the boardroom, warn solicitors.

The problem can affect directors who want to sell their shares in a business.

Under some agreements, shareholders who want to sell up must first offer their shares to their fellow shareholders at market value.

In the absence of such an agreement, the value of the shares is often to be determined by the company's auditors.

But now a change in ethical accounting standards prohibits auditors in many cases from providing valuations to their audit clients - sparking boardroom rows over the value of departing directors' shareholdings.

David Ashplant of Bournemouth law firm Lester Aldridge said: "Such articles will therefore no longer work and shareholders could be heading for a messy dispute further down the line.

"The articles many companies have were adopted years ago and will no longer reflect the way the company operates, which will create difficulties and increase expense if there is ever a dispute among the owners of the business."

He is advising shareholders to check their articles to see if they need changing. It is also a good opportunity to give them a general overhaul: "The investment now could literally pay dividends in the future," said Mr Ashplant.

First published: October 13