Hi i currently own a limited company 100% of the shares. my friend initially gave me 10% of the funds because i wanted him in with me on my business as we are friends. Even though this money was actually a lot less than 10% Well all agreed to do our part in getting the business successful Now that the business is getting going his family have become involved and have demanded he ask for 50% of the business. His wife and family are getting so involved it is really starting to damaged the relationship. They are also demanding an amount salary for the work he does thats is just not in the interest in the business. we both do our share in the work and up until now we have both been working for no salary. im made him a very reasonable offer of a wage what is equal to the current full time job he is doing and he flatly refused saying his wife will never have this because he has told her how much money the will get and be able to buy everything they want. I no longer want him involved in the business as he only seems to care what he can take from the business and to me thins is not in the interest of the business. please can anyone let me know where i stand as the only share holder in the company and the director.
I forgot to add that it was just a verbal agreement the 10%
Sorry for the confusion. I told him if he gave me £1500 he can have 10%.
But in fact it was actually less than 10% of the funds i put into it. around £17000. But him being a good friend i didn't mind.
The reason i delayed him actually becoming a shareholder was because he gave me the money bit by bit and making up excuses.
I know i was very foolish for allowing this.
I would work on a stall in a shopping centre and he would try to set up the website. the stall done terrible but in fact saved the life of the business as he admitted to me when i closed it he felt bad because he had basically done nothing to help as the website had only took £240 in them 6 months .the stall i worked on actually took £6000 and enabled us to change our product and become successful because the website really started to pick up once he started doing some work.
He believes i made the business fail and he made it work.
The problem with his family getting involved is he is discussing the business with them and not with me. allowing them to see the websites turnover and profits. The business started 31/08/2012. we actually spoke to the accountant a few weeks ago about putting him down as a shareholder and both agreed we both start to get the same basic salary of £650 a month.
Now he isnt happy and at first said he wants a bigger share, after i refused he said he wanted a salary that as far as i am concerned would completely drain the business of everything . the salary added up to £3400 a month.
I want to offer him a fair amount because i do appreciate the work he has done lately. i want to offer him £5000 and im on my own. I have contacted you first before i make him any offer to find out if he refuses could he sue me.
it was a verbal agreement that i would give him 10% and i fully intended to a few weeks ago when i said to the accountant to contact companies house and add him as a 10% shareholder. previous to this i was trying to sort out tax and stock and . i fully intended add him as a shareholder but because of my inexperience with running a limited company. it was quite unorganized so i booked the appointment with the accountant to actually add him .because previous to this we didnt even have an accountant.
But considering the abuse i got in text messages and a phone call being blamed for not offering 50% because his wife told him he deserves 50% and then if not a higher percentage demanding £3400 a month salary.
The stall in the shopping centre and website were both selling electronic cigarettes. all part of the same business. the initial agreement was i work on the stall and he works on the site. this didn't happen. i worked on the stalled every day and he done virtually nothing from the start of the business until March. i closed the stall in February feeling all of my motivation had gone because i was clawing back any money we had spent all i had left was just over £3000 because half of the takings from the stall went on rent. the site had taken £240 in 6 months. i got a phone call saying from him admitting he feels bad that he has done nothing.
i was angry but eventually let it go.
He then started to help and i risked the final £3000 all we had left into more stock i believed would be the correct choice. the site was extremely slow but has now picked up. now its turning over a large amount each month his wife and mother in law have told him he deserves 50%.i said no. and got a lot of abuse. I said to him how about a bonus of 40p every parcel on top of the basic wage. which gives a salary average total of £1300 a month . he flatly refused saying his wife she it has to be more.
I feel his family involvement will lead to far more interference and demands the more successful the business becomes.
Really all i want to know is do i have a contract with him ? in a court of law can he demand his 10% because i dont want him part of this business
i am willing to pay him.
one more question. when you say if the business is successful pay him off and get rid of him. Do you mean totally rid of him even as a shareholder or just and employee? Thank you