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.

[Bubs101]

@HelenUrth

Technically I own 50% and my Dad the other 50%. But it's always been viewed as both mum and dads share.

[Bubs101]

@BobLemon

Thank you :) I was quite lucky as my start-up costs were really low and was bringing money almost immediately, I had made a lot of connections during my previous job to kick things off and things just kept growing!

[Schmoobarb]

If they give the shares to your brother your relationship with them will be fucked anyway OP

[BollocksToBrexit]

Check your articles or association and shareholders agreement. If you used a standard template you may find that shares have to be offered to existing shareholders before they can go to anyone else.

[YetAnotherSpartacus]

Seek legal advice, but also see someone who you can talk through your relationship with your family with. In your shoes, I'd be going NC because you have been used and abused. You might not want to do this, but I think you need some perspective on past issues. Meanwhile, have a look at the 'they took us to stately homes' thread here and see if anything resonates for you.

[StatisticallyChallenged]

You've done very well OP, but the value of the business is you, by the sounds of it. I don't think what clients would basically see as a name change/rebranding would hurt you much at all by the sounds of it.

You're under no obligation to work for your parents. So...stop.

[mummmy2017]

I think you have paid your dues to them.
Ask your parents why you have to keep your brother....
Explain how much you have paid them over the years.
Then tell them either they accept your money for the shares or you close it down....

[Bubs101]

@StatisticallyChallanged

They're just shareholders, they have no involvement in the business at all.

[showmeshoyu]

If your IP is in your own abilities, it's fairly trivial to move things over to another vehicle, even if it has to be set up in an interesting but legal way. There's a reason some companies have no compete and no poach rules in their contracts. As you're not under that, you can transfer the contents of your head elsewhere. They're welcome to the remnants of your business if you and your staff start an "unrelated" v2.0 or your business and go NC with them for thoroughly fucking you over.

[MrsArchchancellorRidcully]

Find yourself a decent chartered or chartered certified accountant and get proper advice. They will be able to help you get the best result for you and your staff.

[AdoreTheBeach]

I would certainly seek legal advice. You can’t strije a company off with assets - or they go to the crown, plus shareholders are responsible for debts for years afterward and can be reinstated to deal with debts. Liquidation is what you’ll want to do, but after you’ve emptied all assists. It’s called members voluntary liquidation - but that requires the shareholders to agree.

Talk to an accountant too. You may want to consider setting up a new company into which all new business is contracted. Transfer business lease and other expenses into this company name. Your new business and old one can enter into service agreements, whereby your new company provides services the existing contracts - for a fee. Other services could also include bookkeeping, payroll, rent, storage, treasury fees etc - again, all for a fee. This is perfectly legal (and tax efficient). Once you’ve effectively run down the contracts in the existing company and drained cash for paying for services provided by the new company, advise your patents the company needs to be liquidated, all you’ll need to give to them is their face value of the shares they hold (less split if the costs of liquidation). There are fees to a liquidator and they usually base that on share capital. Once a company is liquidated, it’s completely dead, cannot be revived (unlike striking off).

[Maryjoyce]

Dissolve the business and reset up your own in a new name it’s not hard but do it with a solicitor

[Maryjoyce]

Set up new business yourself and sell your own shares end of problem

[Bubs101]

@YetAnotherSpartacus

I suppose I feel indebted to them, they've provided so much for me, paid for private schooling, paid for my first car, paid for my master's degree and maintenance abroad (not undergrad as the fees were cheap back then). So I suppose the 100k doesn't even scratch the surface of what they've done for me, so I feel guilty, that's why I guess I allowed them to receive dividends for so long, as it was my way of paying them back. But now it sounds like they're giving it to my brother!! Which I cannot stand for, and that's where my line has been drawn.

[pallisers]

I wanted to go to the bank and take out a loan but they insisted I would be better off taking the money off them, I was quite young at the time and had quit my job so was quite desperate.

Calculate what you would have paid back to a bank in interest on a loan of 10k. Then calculate what you have paid them in dividends over the years. Then remember the bank wouldn't have extorted 50 percent of your business from you. They took shameful advantage of you. They are not acting in your best interests.

Please see a good solicitor, OP.

[TatianaLarina]

I think folding a company requires 75% shares, you may have to go to court to wind up. But a good business solicitor will advise.

In the mean time would I would turn the tables with shameless emotional blackmail and tell them you will go no contact if they go ahead with this plan.

[Maryjoyce]

But donit with a solicitor they can show you easily how

[pallisers]

I suppose I feel indebted to them, they've provided so much for me, paid for private schooling, paid for my first car, paid for my master's degree and maintenance abroad (not undergrad as the fees were cheap back then).

My parents paid for private school and university. They did it because they really wanted me to do as well as I could and they took great joy when I did. I didn't feel indebted to them. Instead I felt an obligation to try to do the same for my children. So I have - private education, university, car. I don't feel entitled to half of my childrens' earnings or businesses. Instead I expect them to try to do the same for their children - launch them as best they can - if they have them.

I suspect you might benefit from the stately homes thread on relationships.

[TatianaLarina]

Do you have any shareholder agreement?

[Aquamarine1029]

You. Need. A. Solicitor.

There is no other advise you should listen to.

[C0untDucku1a]

Whag BollockstoBrexit said

And feel
Absolutely no guilt or hesitation. They are all nobs

[MissyCooper]

Checking the articles for rights of pre emption is a good shout (where they need to “offer round” the shares to existing shareholders first)

[adriennewillfly]

Wow. Let them give their share to your brother. Then stop paying any dividends at all, set up a new company to transfer any existing contracts to. Run down the company money through salaries and a very very large pension contribution. then when your brother asks for his share, there's nothing to give him. Et voila, you don't even have to pay your parents their money back.

[MissyCooper]

But yes you need to see a lawyer for sure.

[Bubs101]

@pallisers

They told me no bank would lend to me as I'm too much of a liability, with no assets, no job etc. I was really vulnerable at the time and genuinely believed they had my best interests at heart and trusted them.