Please help me to extricate myself from this arrangement(8 Posts)
I'm a regular, but I've namechanged for obvious reasons!
I've come to the realisation that my impossible business partner (BP) is never going to change and I need to leave.
We have been working together for 18 months now, and have been able to impress many pepole (funders, potential clients, advisors, etc) that our idea (for a CIC) is a good one. Unfortunately, we can't get to the position where we are actually trading and doing the work. My BP thinks they are working towards it, but chickens with no heads spring to mind when I work with her and although I've tried, I realise the stress is not worth it. This will not improve and I've had enough. What do I have to do legally to get out?
Our finacial situation is that we have only had one paid piece of work, but we have had a start up grant from the council, and are about to hear about another grant we've applied for. We have both made small Director's loans to the company, which I would want back. All the money in the bank at the moment is allocated to pay for a website which has just been built. We have not yet paid ourselves any salary from the business.
The business idea is a great one, but with BP at the helm, it won't go anywhere. I don't have the strength to fight her for it, and would rather walk away.
BP and I are the Directors of the company. My questions are..
How can I get myself off the paperwork?
How do I get my director's loan back?
Am I entitled to any of the money we've made so far, given it's been spent or allocated (although some grant money will be coming in, it's also tied in to being spent on the things we put in the bid)?
Am I still responsible for ensuring a tax return is made for last year (2012/13) and this year (2013/14)? In other words, can I (please!) just get up and go, and leave BP to it, or do I have to carry on working with her on the finacial side?
Thanks in advance.
I don't know if it helps to answer your question or not, but there's information about director's loans, and how they can be repaid, here:
I'm sure someone will come on here with better, more informed advice, but in the meantime, have you spoken to your accountant (assuming you have one)? I'm sure they will be able to advise you.
Another question - when you set up your company, did you talk about what you would do if one of you wanted to walk away or dissolve the business? Did you appoint a mutually agreeable third party to mediate if you needed it?
There's some advice here about how to get out of a business partnership:
If you're a Ltd company this tells you how you can resign from the company:
On a more personal note, have you tried talking to your friend about your feelings? If you don't think it will be constructive, you don't need to mention exactly why you want to walk away from the business. It's always better to try and be open and handle these kind of things as amicably as possible. But of course it's wise to understand your legal position and options first.
I do appreciate your situation. About ten years ago I started working with a friend on a brilliant business idea, and though she was an amazing sales woman and an incredible force of energy, she was very much like your BP, and after a year of making no progress (partly because she kept changing her mind and our business strategy so we had no opportunity to learn what was working and what wasn't) I walked away. Luckily (!) we had made no money and had no legal binds so it was easy. I now have a new (VERY carefully chosen) business partner and its a much more positive experience.
Hope the above was worth the bump
Thank you so much for your answer, lovefreelance. Yes, you've got it exactly right with my BP, that is just the situation. We have talked over this very often. I have explained how stressed and confused I am by her constantly chopping and changing direction, but to no avail. She simply doesn't get it.
It's OK whilever she respects my need to work at a more steady rate, and curbs her desires to go off on a different direction, but this week has finished me off. I know I want rid of it. My health and ability to function in the family is suffering because of her constant demands and intrusion into my time.
I've looked at the links you provided-thanks for those, as I had Googled and just come up with other forum answers.
The Director's Loan was from me to the company, without interest. From what I can see. is the loan is repaid without interest, I don't even need to declare it. Can anyone advise me on whether I am right on this? Also, what happens if my BP can't afford, or is reluctant to repay me?
I can see that I need to fill in a form and send it in to Companies House to get me taken off the records. Do I ammend the Articles of memorandum and Association myself and send those off, or is it my BP's responsibility?
Also, how do I get my name taken off the bank account? Is that a straightforward letter to the bank/ Do I need to wait for confirmation from Companies House first?
What I really need is an Action Plan, with priorities on it...do this, then this, then this... To be honest, this is what I've been needing all along with this business! Now I need it to get myself out .
Maybe we tried to start a business with the same woman
I don't know about business banks, but if you have a joint personal account you need both signatures to close an account (you can't just remove yourself from it... as I discovered when I got divorced and my ex disappeared!). Best thing to do though is ask your bank.
An action plan is a good idea - it will help you to make sense of everything you need to do, and give you a sense of getting somewhere as you tick tasks off.
Good luck (again!)
I'm hoping someone on here can help me write the Action Plan!
So far, I've got...
1. Tell BP. I want to have all the other steps in place first, though, so that I can say 'I'm leaving, and this is what is going to happen next...', rather than have her drag me around by the nose for any longer.
2. Fill in form to remove myself from the Companies' House records.
3. Contact the bank, sign the papers needed, and ask her to sign too, if necessary.
4. Get the money back that I lent to the company, or get a note from BP to say she will pay it back by a certain time (how do I do this???).
5.Write a very polit email to all our contacts thanking them for their support and saying Goodbye.
I really could do with some advice on how far my responsibilities lie with regards last year's and this year's tax returns. We don't have an accountant, so I don't know where to go for this one at all. I can't appoint an accountant, and the company doesn't have the cash to pay for one, at the moment. We were going to use a further Director's Loan, or the proceeds of some paid work to pay for that.
Are you talking about corporation tax? If you have your three digit corporation tax code you can find the contact details for your office here:
They should be able to help advise you on what you need to do re: tax.
And yes I agree it's a good idea to have all the other steps ready to go before you tell your partner!
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