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ExP and joint business

(26 Posts)
strong123 Sat 20-Dec-14 16:23:10

I need your thoughts please...split with P in April. Would have liked to have gone NC but can't because we are also business partners. Things have been getting more and more difficult working together and I don't think it can continue anymore.

We both own 50% of the company and he can't buy me out. I invested the money to start the company up but he has been working there on a day to day basis so has the knowledge. I continued with my normal day job but am currently on gardening leave having been made redundant.

Would you just walk away? I've tried to look into selling my shares but he can be very difficult and would not work with anyone else. I am at a loss as to what to do next. Has anyone been in a similar situation?

FelicityGubbins Sat 20-Dec-14 16:28:38

No way would I walk away, could you sell your half of the business? Tough shit if he doesn't want to work with anyone else, it's a job not a hobby!

Tobyjugg Sat 20-Dec-14 16:33:35

What does your partnership agreement say about one partner selling their share to a 3rd party? That may be a way out for you.

strong123 Sat 20-Dec-14 17:36:17

Our shareholder agreement says we have to offer our shares to the other partner in the first instance (which I've done and he has ignored) and can then sell outside. However speaking to a couple of companies they have suggested that it would be difficult selling to a third party if he is unhappy with it. I am completly stuck - he organised the Xmas party for the company (there are only 5 of us as we are a small company) and he didn't invite me. I am at a loss what to do - we really need someone as a mediator but he would never agree to that!

Quitelikely Sat 20-Dec-14 17:50:18

It depends how much we are talking?

strong123 Sat 20-Dec-14 17:59:01

I invested just under 10k - the business is doing well - makes a good profit but he will buy a new company van without telling me so we have 4 company vehicles and only 2 members of staff who use them.

He sees it very much as his business and tells me that every time we have a disagreement.

Twinklestein Sat 20-Dec-14 18:01:06

Does he really have more knowledge than the other employees?

If you could raise the funds would he agree to your buying him out?

Twinklestein Sat 20-Dec-14 18:02:52

Xpost he doesn't sound like he really knows what he's doing OP.

If you invested 10k how much do you need to buy him out?

strong123 Sat 20-Dec-14 18:05:07

He has some knowledge but no more than others - he has been in the industry for about 5 years and makes out that he knows a lot more than he does (I think).

He wouldn't let me buy him out and I'm not sure that I would want to do that - I did think about it as I am getting a redundancy payment in the new year but with a house, 2 children and no financial support from him, I am not sure that I can take the chance

strong123 Sat 20-Dec-14 18:07:18

When I had the business valued recently it was worth �67k - the thing is he would probably quite happily run it into the ground so that I get nothing.

I tried to ask him to leave before and he took all the stock out of the office and changed all the company vehicles from the company name into his.

DingDongMerrilyOnSherry Sat 20-Dec-14 18:07:58

Could the other employees buy him out and become co-owners?

strong123 Sat 20-Dec-14 18:10:56

DingDong - I don't think any of them would be in that position. One of the employees is an old friend of his and even he is not interested.

DingDongMerrilyOnSherry Sat 20-Dec-14 18:12:28

I tried to ask him to leave before and he took all the stock out of the office and changed all the company vehicles from the company name into his.

I think you need a lawyer.

However speaking to a couple of companies they have suggested that it would be difficult selling to a third party if he is unhappy with it.
Difficult is not the same as impossible. There are investors who thrive on this kind of stuff. Personally, I'd sell it to anyone else, preferably the best business "angel" bastard I could find, even for £1, rather than let him get away with shafting me. I have a successful business btw grin.

DingDongMerrilyOnSherry Sat 20-Dec-14 18:13:55

You know that thing with the company vehicles is fraud, right?

strong123 Sat 20-Dec-14 18:16:31

That is exactly what I feel like doing - a lot of the time I would pay someone to take my shares!! But then why should he just get everything?

I have also worked hard - working in the evenings and weekends to make it a success. I wish I could find someone who would help and support me in the business as he is a bully and does a lot of things that would not be accepted by anyone else!

strong123 Sat 20-Dec-14 18:17:23

I did report it to the police but apparently it is a civil matter and they wouldn't do anything about it.

Joysmum Sat 20-Dec-14 18:17:31

Personally I think something is better than nothing so if you've had it valued at £67k (does that include goodwill?) then even selling your half to the employees (they could each buy a share) for your original investment of £10k between them all would be better than nothing.

Twinklestein Sat 20-Dec-14 18:18:31

And you made him change them back again?

No third party with an ounce of sense would take him on as a business partner. So if you want rid you're going to have to buy him out.

You're not talking huge sums, I would talk to some business advisors.

strong123 Sat 20-Dec-14 18:21:43

Yes the vehicles have now been changed back.

No third party with an ounce of sense would take him on as a business partner - this is exactly my problem.

Some days I am so tempted to take my money out of the business account, resign as a director and never speak to him again!!

Twinklestein Sat 20-Dec-14 18:30:44

Without knowing the sums involved it's impossible to judge how much of a risk it would be for you to raise the cash to buy him out. You've considered third party investment to help you buy him out, rather than looking for companies to buy your share?

strong123 Sat 20-Dec-14 18:35:15

It would be a big risk for me I think as it is not my area of expertise and I know he would set up down the road to make life difficult for me!

Not considered 3rd party investment as I was thinking more along the lines of finding someone to buy my shares.

deserttrek Sat 20-Dec-14 18:47:33

One or other of you is going to have to buy the other one out, it wont work otherwise.
I am not sure what the valuation of £67k relates to, but if its mostly 'goodwill' then it may not have much value if the two 'proprietors' have fallen out. I am assuming it is not any form of property based business, where the underlying property could be sold.
So, it will be valued only on the basis of its income stream and as an income resource to whoever takes it on.
In which case it might be worth, as part of any separation, letting him have it in return for something else.
Just one thought though - was your original investment shares or loans? What is shown on the Balance Sheet? It may make a difference.
I have experience of these things. PM me if you want to.

Twinklestein Sat 20-Dec-14 18:48:23

By the sounds of his business practices if he tries to set up on his own he will fuck up.

Is the field very specialised? It sounds like you've got a team who know what they're doing apart from him.

You might be able to find someone either who's experienced in the field or a business angel in general to stump up a % of the cash to buy him out in return for a % of the shares. So then obviously you'd co-own with them.

Tobyjugg Sat 20-Dec-14 18:56:09

I think you need a lawyer

I agree.

strong123 Sat 20-Dec-14 19:04:17

Thanks everyone for your advice.

Desertrek - I've just sent you a PM

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