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Stuart J
Stuart J, Solicitor
Category: Law
Satisfied Customers: 22386
Experience:  PGD Law. 20 years legal profession, 6 as partner in High Street Practice
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Hello there! I own a dormant limited company in the UK with

Customer Question

Hello there!

I own a dormant limited company in the UK with another individual. We own the company 50/50 (1000 shares each). The company creates Mobile Apps.

We have no saleable product at this juncture, but we have both invested approximately 3000GBP each to build digital assets for our first Mobile App project, copyrights, business registration etc.

My partner has decided to immigrate, and no longer wishes to remain a Director in the company. He is asking me to buy him out for a total matching his spend to date (3000GBP). I am not willing to pay this amount, and have offered him 1000GBP which he has refused.

What are my next steps if we cannot reach an agreement and I wish to retain 100% ownership of the assets created to date? I am happy for the Company to close, but I want to retain ownership of all assets and copyrights.

Thank you for your help!

Kind regards,
Submitted: 3 years ago.
Category: Law
Expert:  Stuart J replied 3 years ago.
Is he prepared to negotiate at all?
Customer: replied 3 years ago.

I believe he might be willing to negotiate, but I can't foresee him going less than 2 grand, which I'm not willing to do. His leaving the company means that my startup capital is now halved, and I cannot afford to buy him out for the amount he has requested.


Please refer to his last correspondence below:


hmmm, we need to work something out. I am not willing to sell my half for 1k, I think its just too little for what it is.

Although we have spent 6k between us so far, what we have for that money is worth so much more than what we have spent. That is that the company now owns more that 6k's worth of assets, half of which would therefore be mine. You did say in your original email that you would buy me out for what I have spent so far, part of my thinking was relying on that being the case.

To pay 3k and then own absolutely everything, all code, all artworks, the copyrights, the domains, the entire company and game is a very good deal. It puts you in a strong position going forwards. You will have a product in a state which it can be taken directly to an agency and produced into a game. That is a serious proposition.

I appreciate you dont want to risk more than 1k but without a bigger offer, the whole project could be at risk. It's probably more useful to consider how much the project actually means to you as well as me before we agree costs. I'm pretty sure you wouldn't sell your side for 1k. I really think the fairest way to do it is to cover the money I have put in and draw a line under it. It is the simplest figure involved, I could obviously make the case that I have put in a lot of time and expertise into this for two years also but I'm not asking anything for that.

Can you take a bit of time to think about it and get back to me with some more thoughts on a price. I am happy to discuss further.

And from my original email which he refers to:


Ofcourse if you no longer wish to finance the project, there are other options - I could buy you out for the amount you've spent so far for example - but there's no way this thing would be as awesome as it is now without you, and I want you with me every step of the way.

Although I did mention buying him out for his spend in that email, I merely suggested it as a possible option. At the time of writing this above email, I was not aware he wanted out of the company.



Expert:  Stuart J replied 3 years ago.

Remember that what another problem you face
is that if you cannot come to an accommodation with him and you carry on with
this company, if ever it takes off good style, you will end up paying a lot
more to get rid of him.

Unless there is an agreement to the contrary,
all assets and copyright vest in the company and if the company went into
liquidation, they would be sold on the open market and you may be bidding
against him. But in any event, you would be buying the assets off the
liquidator and there could be quite a big hiatus (costly) during which you
could not trade using the company assets.

You have offered £1000 and he has spent 3000.
You think he would probably settle for 2000.

You are therefore only £1000 adrift and it
depends what it is worth to you to put the whole thing behind you. £1500?

In cases like this, I never suggest making an
offer. I suggest sending a cheque. Armed with a cheque in the hand for some of
the amount they want, compared to an argument over the whole of the amount,
(and arguments. They may win or lose) the cheque in the hand is a pretty
powerful incentive to accept it.

So consider deciding how much you would like
to pay the (you need to make it attractive enough) and send it with a covering
letter headed "without prejudice save as to costs". That means that they cannot
produce the letter in court as any proof that you admit owing them any money at

Tell them in the letter that you are offering
this money in full and final settlement of all claims against you, past,
present and future, and that by cashing it they accept it as such. Tell them
that if they do not accept it, they should return the cheque to you and if they
issue legal proceedings, you will defend them on the basis of A, B, C,

Tell them that if they do not understand the
significance of the letter. They should take independent legal advice.

I can tell you this approach works nine times
out of 10, provided the offer is reasonable and not derisory.

For legal reasons which I will not bore
you with but which go back several hundred years, the cheque must not come from
you, but was come from a third party, friend, relative, solicitor, our
accountant, neighbour, girlfriend, wife, husband, whoever, just not from you.

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The thread remains open.

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