To not want parents to give away half of my business?(431 Posts)
First-time poster here! So go easy on me.
I set up a small consultancy business about 10 years ago and am doing quite well for myself now, however it hasn't been easy. My parents gave me an initial sum of £10,000 to help set things up, however, this was on the condition that they own 50%, which at the time I agreed to, as they were my parents and kindly invested in the business and me. 10 years later their initial investment has been paid off and they have been regularly receiving dividends, so have done quite well of the initial £10,000.
However, as I'm in a good place financially I asked them about buying back the shares they have, gradually, so I can have full ownership of the business, this was initially agreed that I would be able to do this when they first invested as my parents "don't want anything from me". But now this is where it gets tricky as they have now refused saying they are going to gift my brother the shares instead! As he is expecting his first DC (I have none) I'm shell-shocked and livid. My brother and I have a very complex relationship and he was physically and verbally abusive to me before I moved out, though he faced no consequences as he was the golden child who could do no wrong! My parents are aware of how I feel about my brother and we are virtually NC, except Christmas where we are civil for the sake of the family.
I'm just really upset by this and was wondering if there was a way I could stop this from happening. I've worked so hard to get my business to where it is, my brother is working but has always expected handouts and is naturally smarter than me but very very lazy so he earns about a third of what I do. I just don't want him to reap the rewards of my blood sweat and tears especially after how awfully he has treated me. I've told my parents how I feel but they are having none of it and have told me that they own half the business and are entitled to do with it as they please. AIBU in wanting to seek out some legal advice regarding this, I just fear my doing so my parents will cast me out.
Get legal advice
If I had paid them back the 10k in the form of dividends over the years I would have no qualms in dissolving the business and starting up again like all those dodgy flunks glazing companies do
If you've paid them back then find a legal way to get them out
Holy shit! That's terrible! See a solicitor asap, I have no other advice I'm afraid, hopefully someone else has
How did you set it up? A limited company?
I'd be tempted to close the company down and set up a new one (over which you have complete control) if they do gift the shares to your brother. You're established now so I doubt it would make any difference to your clients.
get legal advice. Your parents are perfectly happy to put you in a terrible position - they aren't worrying about you casting them out. Treat them the same.
What was the original agreement and is this a properly set up company. I can't help feeling your parents have received a hell of a return for 10,000. If you paid back the 10k how come they still have shares? If the 10k was an investment it didn't need to be paid back. If it was a loan and you paid it back, then they don't own anything.
If you are essentially the business - sole worker - then I would tell your parents that you are going to wind it up as you have no interest in working to pay money to your brother. Wind it up, pay them off and start off again.
This is bizarre. The business is effectively you and your own skill set. Why should everyone else profit from that?! Start up again and cut them out
I'd probably dissolve the company and then open up under a new name. Have no clue if that would be legal though but surely there's some sort of loophole
Agree with the above, see if you can close the business & reopen with a very slightly different name
How was it all agreed in the first place? It seems really odd that they invested 10k in exchange for 50% ownership and still own half even though they've had that money paid back. Get legal advice.
Thanks for the replies! the 10k was an investment in return for 50% of the business, if I'm honest they have gotten around over £100,000 in dividends over the last 10 years, but my priority was paying off student loans, my mortgage, cars, paying for a wedding etc. It's only now that I have enough money that I want to buy back.
Are you a sole trader or a limited company?
Tell your parents they either sell to you or you close the company down...
That your brother was abusive to you, and you refuse to finance him.. If they want to give him the money you pay for the shares fine....
Also contract yourself out and charge more for your skills.. So no profit.
Bloody hell. Definitely get legal advice. That's appalling.
I would dissolve the business and start up again. They've got a bloody nerve.
Do you think your brother would even accept such a gift OP? Surely he would be ashamed to be sponging off his sister like that.
Or if you think he would accept, do you think he has had some influence over your parents decision?
The condition was that they would invest, and once the initial 10k was payed back (not including any money received from dividends) then I would have the opportunity to buy back. Stupidly I agreed as I was young, naive, penniless and trusted my parents wholeheartedly. So whilst they could have received £15,000 in dividends, I had to pay off the 10k separately. It's only now I realise how much I've been taken for a ride.
GET RID OF THEM
You owe them nothing. Make sure it's legal then drop them.
If they kick up any sort of fuss DROP them - they just see you as a cash cow
Totally agree with everybody who is saying wind the business up and re start it.
I’m utterly appalled on your behalf with the shoddy behaviour of your parents. Talk about the golden child! How anybody with decent moral fibre could think that giving your brother their shares is the right thing to do is beyond me.
Get legal advice, speak to your accountant and get a new Ltd started ASAP. As a sole employee then YOU are the business - and your CF parents can’t own and give away half of you.
I would give them a big [ blows raspberry] and tell them to stick their half of a non exsistant company where the sun don’t shine!!
I wish you bloody good luck with your new company!
This man used to punch me in the face if I asked him to put his dishes in the sink when we were younger, he would have absolutely no shame in taking the 50%. He doesn't see it my business, but mum and dads share.
Limited Company - wind it up and reform a new company as a sole trader. They can whistle for their money the cheeky bastards 🤬 I find it hard to comprehend how parents could take advantage of their own child like this.
If this was me I would close it down and reopen a new one with just yourself and no other shareholders. No way abusive lazy brother would have my cash. Talk to solicitor and accountant ASAP pls
Get legal & financial advice. My dh and I are in the process of buying back shares in our company and it does leave a bitter taste. Do it sooner rather than later. We're doing it as we can now afford it and don't want to be left in a position of another family member having a say in our company.
Do you not need a 75% shareholders resolution to dissolve a business? Or could she do it with 50%
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