To not want parents to give away half of my business?

[Bubs101]

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.

I am soooooo happy for you

I was thinking about this thread a while ago
And it enraged me to a disproportionate level

Please disentangle yourself from them and continue LC ideally no C

Your treatment of you is frankly deplorable

Their treatment* gaaaaaah

Thanks for the update op.

It's not really a happy ending though is it op? Financially its worked out but you've realised your parents are crap which can't be nice. Hope that you can come to terms with that and enjoy the benefits your 100% owned company brings you.

Well done 💐

Tell your parents that you are therefore going to dissolve the buisness, so they either sell you their share in the buisness or you close it and if they want to give your bother the proceeds then thats up to them but he’s not having a say in the your buisness.

If the £10k investment was in return for 50% shares and you have paid the £10k back then at that point you should have had the shares transferred to you as you have already bought them back!
To be clear though, did you actually expressly repay the £10k investment, or does that £10k form part of the dividends they have received over the years? If it's the latter then you technically haven't paid back the investment and they still rightly own the shares.
You need to read the company articles. There may well be restrictions in there about the transfer of shares (eg a director can refuse the transfer of shares or that they have to be offered to the existing shareholders first), then get legal advice.

Duh. Rtft Northern!!

If they lent you £10k, in exchange for shares, now you’ve paid back the £10k why don’t they give you back the shares. Why do you have to ‘buy’ them back. And they’ve had £100k of dividends, this was such a bad deal. I would never take this from any of my children, i’m afraid they are very money grabbing.
Also why would you feel indebted for school/university fees, any parent who can helps their children out, they do it because they love them, they don’t expect it paid back over their lifetime.

How much money did they get off you to buy back the shares?

Just saw the update that great news!

Only just come across this thread very pleased with the update, hope they treat you fairly.

Well done, OP, for standing up for yourself.

Feels good, doesn't it ? Go for it.

Good update op

Thank you for updating OP. Very happy for you - well done.

I'm glad that this has been sorted, thanks for letting us know.
You now have to give them 10K ?
make sure it goes through the company, & they sign it off legally
Then move.

An excellent update! Thank you

"In the end, I went to a solicitor who informed me of my rights, and whilst legally there was little I could do. I think the fact I actually stood up for myself for once and went NC for the whole time, scared them a little, and my parents have agreed to sell the shares back to me."
Glad it resolved but do make sure you follow through eg if they had a share certificae you need it back, make sure they sign stock transfer forms, remove them as shareholders in the company's register of shareholders etc and make sure there is a clear letter from you or your solicitor to them setting out what was agreed in case they disagree again later.

So glad to read this update. Make sure you get it done legally and quickly before they change their minds and then move away and go low or no contact. You don't need people like that in your life.

No idea how I missed this when it first was posted but just as well, it sent me into a rage! Well done OP, thank goodness justice has prevailed. I am still fuming at your parents taking £100, 000 from you however.....

This is horrible!!! I'm so sorry for you! I definitely think you should seek advice, perhaps not just legally at this stage but from a financial consultant who can advise the way forward.

Not the same situation as such but my Uncle owns a company and brought in my Cousin as a director and gave him half (My cousin is completely useless with everything, including money) however, while it seemed my uncle gave him half, what he actually did was set up another company with almost the same name and give him half of that so it limited his liability and he still had full control of the original.

You could do the same thing but backwards; set up a second company with a similar name (think Teapots Direct LTD vs Teapot Direct UK LTD) and run them in tandem, with most of the resources and invoices etc going through the new company and wind up the old one at your own pace.

Just closing one and starting up a second seems like a good idea in theory, but this is a different situation to those who phoenix companies and I think if they are shareholders too your parents would have a 50% right to anything the business was worth on winding up which defeats the object. You also wouldn't loose all the marketing and brand building etc that you have done. The only thing your customers would really know is new bank details and a slightly different business name which you could just market as a re-brand and use it as an opportunity to market to some older clients to (GDPR allowing!)

You can also loan your new business a sum of money to pay for the initial set up costs. I am assuming your parents don't see the P&L accounts on a regular basis?

I would also maybe advise not telling your parents of your plans before you do it. Telling them that you would rather close the company than give it to your sibling is unlikely to make them think again and will probably cause you more aggravation in the long run.

Good luck in whatever you end up doing! I hope it works out for you!

Oops my bad, didn't read it all.
Things like this just make me so angry! Really pleased it is all sorted!

I've just read through this thread from start to finish and I can't believe the gall of your parents! Well done for standing up to them like that, that took real strength and I hope it all goes smoothly for here out.

Glad it resolved but do make sure you follow through eg if they had a share certificae you need it back, make sure they sign stock transfer forms, remove them as shareholders in the company's register of shareholders etc and make sure there is a clear letter from you or your solicitor to them setting out what was agreed in case they disagree again later.

I very much echo this, it is very sensible advice.

Glad it has sort of resolved but annoyed on your behalf that you are having to buy the shares back from them. Can you list out what they have received back over the years and make your case for a £1 price?

I find this really sad that your parents would want 50% and they had to get something out of it if they gave you £10k! Why couldn't the promise of you paying them back with a bit of interest do? Wow, I'm shocked, I couldn't do that to my children and I'd be so proud that they'd made a successful business and be glad I couldve help.
It sounds like they always had plans to gift your brother this. Does he know business or will he mess it up for u?
I'd get legal advice and as a pp said, go into liquidation and start again.
I understand this may upset the family and cause grief but your parents aren't really bothered about the grief this is causing you so f**k it in my opinion!

Just saw your update. Well done!