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.

it was my way of paying them back

Children do not pay their parents back financially for their up bringing.

I agree with everyone else. Get legal and financial advice ASAP and get a new business set up.

You aren’t responsible for your brother, even if he was nice.

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).

They are your parents, in the words of Chris Rock 'That's what they're fucking supposed to do' (if they can)

No way would I have an abusive sibling getting rewards for my hard work. NO FUCKING WAY.

Good luck op. Your parents sound awful

Disolve and start again with an almost identical name

I wonder if this is a way of making you have a relationship with your brother given he has a DC on the way?

Not that it makes it any better.

I've not read all the comments and it seems you have had some wise advice.

Re your opening question...

"AIBU in wanting to seek out some legal advice regarding this, I just fear my doing so my parents will cast me out."

No you are not being unreasonable. If your parents cast you out, their choice. Do all in your power to save your business for your parents (who are attempting to renege on your original deal!!!) and your low life brother who was violent towards you.

You protect you. Take the good advice of the wise folks here and let us know how you get on.

Your parents are awful OP

I hope you can find good legal advice. Get the best, it'll cost, but do it.

nothing to add but sad for your situation

You need proper advice

What do the Mem & Arts say? Is there any shareholders agreement?

they always talk about we are a family, and that families make sure everyone is well taken care of

But they haven't really done that for you, despite what they may have paid for you in the past. They have been taking advantage of you and of your succes and are now deliberately doing something regarding your own business without regard for your specific wishes. Horrible!!!

See a solicitor and good fortune to you!

Was any of this done properly with legal contracts? Was the buy back clause included in these contracts?

This is terrible!!!

Dilute the value of the shares. Move the assets of your business. Transfer your contracts. Give him absolutely nothing.

Most businesses fail. You don't have to put it into liquidation (you'll never hear the end of it). Do this legally. Start transferring contracts now. Start running the new business using the assets and resources of the old business until the new business is profitable and the old business is in financial distress. Only sign contracts up under the new business.
; Then close down the business that your brother owns 50% in.

At first it will be to avoid paying him any dividends. Eventually, there will be nothing for your brother to sell.

See a lawyer, but tell them that your aim is to give your brother absolutely nothing.

You have been given some really great advice here. 💐

There are ducks. Put them in a row. Then take action.

Duck 1. Talk to your accountant about existing set up - shareholder/director etc
Duck 2. See a solicitor
Duck 3. Research ‘phoenix companies’
Duck 4. Wind up your company
Duck 5. Establish another

You have said the business is based on your skill set. So without your participation, they have a 50% share of nothing.

If necessary for family harmony, tell them you are closing up because you have realised you need more time to yourself, you have been working too hard, you want time off to enjoy the money you have made now that you don’t need to spend it on buying them out etc. FYI - I would say fuck to family harmony at this stage but it sounds like you are not quite there yet.

Paying for your schooling etc is not something that parents should be repaid.

It doesn't sound like your parents or brother respect you. The best way to deal with this sort of situation is to treat yourself with respect.

Whether or not they hand over their share of the business to your brother, it's time to take action. They'll just leave him the shares in their will anyway, best deal with it now. He could end up running your business through malice or ineptitude.

I can appreciate that this isn't easy for you, but you're clearly a capable person. You just need to prioritise yourself for once. Get out of the fog, read up on narcissistic parents and the golden child, and realise that you deserve better.

outofthefog.website/

Running your business = ruining your business

So really was to sort this, you open a second limited company with yourself as a director and only shareholder, (legal to be a director of multiple companies) you and your employees resign (as an employee not a director) and are reemployed by the new company, mailshot all your clients telling them your new company trading details, sell any assets from the old to new, then just leave the old company as a shell company, and if you can afford to just leave any money in the shell company ( you could leave it there for years) there will be nothing your parents can do as they are only shareholders they will only get the dividend when you declare it from the shell, its what Alan Sugar did with Amstrad, perfectly legal however get yourself down to a company solicitor for some professional advise I am sure they'll tell you the same thing

And thinking about it you could spend quite a bit of the funds in the old company on capital assets, so new desks, computers, company car maybe, then transfer those assets over to the new company, just leave enough money in the old company to pay the accountants to keep it ticking over for as long as possible, the money could all be gone through admin (unless you have hundred of thousands in the company) so there will be no dividend to declare then just wind it up that way neither your parents or your brother get anything

Please see a solicitor or someone who specialises in this stuff, this is something that happens a lot, they will give you options. You may be able to keep going as you are, money will just be cleverly moved around. You need to make sure he can't make any decisions that will destroy the company.

The first time I told them, they blamed me, and said how 'I'm not innocent either' and was made to apologise to him for getting him so angry, he got off scot-free.

And they believe families should look out for each other, you say? How would they react if their disgusting victim-blaming made you decide to punch them (not saying you would, of course)? Would they accept that they were to blame for leading you on and getting you so angry?

As PP have said, definitely get legal assistance to make sure your back is fully covered, but rather than trying to wind up the existing company, I would agree with setting up a second company with a very similar name and 'poaching' your staff on exactly the same terms. Inform your clients that it's been done due to 'creative' differences between yourself and silent shareholders - you could consider offering your customers a 5% discount (or whatever) for the first month if they switch to you (to them, it won't really seem like anything more than changing payment details anyway), but I don't think that would be necessary as everybody will know that the valuable commodity they're paying for is the skill and experience of you and your staff.

Once the new one is up and running, you could even offer to let your parents buy you out of the old one for a nominal price. That way, everybody can be happy and you will go on to enjoy the continued fruits of your hard work and efforts prove them right that you're 'nothing without them' and then, without you to 'hinder them and hold them back', 'perfect in every way' 'Golden Boy' and his likewise parents will have a free rein to run the company themselves with their own 'far superior' skills.

That's extremely generous of you and gives your brother an ideal way to earn much more. The only way it will definitely could possibly fail is because if he ends up showing himself for the lazy, ignorant oaf that he is experiencing confounding business setbacks

if they own 50 is it 50 all the way so now your company is worth way more would you need to buy them out half of what is is worth now which I assume is huge compared to at the start?

everyone is so clever! on here.
well not everyone because ive come on but you know...

Good luck

I won’t try and give any advice on the business side as I’m unqualified to do so but please do not feel guilty about your parents. They have treated you appallingly and continue to do so. How anyone could do that to their own child is beyond me. They have taken money from you that should have been used to set you up financially and now want to pass their shares over in a way that they know will hurt you. I hope you can get out of it and never have to pay them a penny more again.

They may have sent you to private school etc but that was their choice. You have no obligation to try and pay them back for being a parent. Most parents would happily gift or loan their adult children money if they are able to. It is very rare indeed for someone to be so callous towards their own child that they would take £100k off them for a £10k loan.

What is the difference in practical terms between your parents basically shitting on you from a great height and casting you out?

Please understand that what 'family' means to them and what it means to you are different things. To you it is the (forlorn) hope that it will have some real, concrete meaning involving your worth being acknowledged and the assurance that you are loved and valued. To them it means the opportunity to play power games and kick you in the teeth for their own amusement from time to time while padding their bank account.

Let them bequeath what is left of your £100k to your brother. Presumably they have set lots of that aside and will find it heart warming to be able to use it to smooth his way in life.

Get legal advice and do not blink if advised to take what feels to you like a stance that is hostile/ ungrateful/ cold / unambiguously in your own best interests and without regard for anyone else or any other claims.

Remind yourself that all of their claims on you and your money are manipulative and self serving. They have not hesitated to go all legal with you, doing what they are entitled to do with no regard whatsoever to any interests but their own. The concept of 'family' is a one way street to them.