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tdlawyer
tdlawyer, Lawyer
Category: Law
Satisfied Customers: 1096
Experience:  11 years experience of general practice.
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I have a 50% ownership with my brother in a manufacturing business.

Resolved Question:

I have a 50% ownership with my brother in a manufacturing business. Due to me being terminally ill, I have not been in work for just over a year and have left my brother to run the business. I have been drawing a monthly income (this is a verbal agreement) since the time I have not been in work. My brother now says that as I am not in work and he is running the business, that he doesn't have to pay me anything. Is he correct?
Submitted: 2 years ago.
Category: Law
Expert:  tdlawyer replied 2 years ago.

tdlawyer :

Hello, welcome to the website. My name isXXXXX can assist you with this.

tdlawyer :

Are you employed by the business?

Customer: yes
tdlawyer :

How long have you been employed for?

Customer: With this business, approx 12years
tdlawyer :

Okay. And you receive income via dividends too, right?

tdlawyer :

Or is this not a company?

Customer: Yes
tdlawyer :

Is this a company?

Customer: yes, a limited company
tdlawyer :

Okay. Is he saying he will stop paying you a dividend too?

Customer: no, he hasn't said that he will stop payments, he just said that he doesn't have to pay me anything!
tdlawyer :

Ah okay, well he might not want to pay you anything, but legally, if the company declares dividends, he has to, as you're a 50% shareholder.

tdlawyer :

So, he can grumble, but until he actually stops paying you, then he does nothing wrong legally.

tdlawyer :

So legally, he must continue to pay you dividends.

Customer: Okay, thank you, XXXXX XXXXX he chooses to pay a minimum amount in dividends, is that ok?
tdlawyer :

No, not necessarily. Are you both directors?

Customer: Yes
tdlawyer :

Are there other directors?

Customer: are you still there?
Customer: ???
tdlawyer :

yes

tdlawyer :

I asked if there were other directors?

Customer: just my brother and me, ie 2directors
tdlawyer :

Okay. Then he cannot decide anything without putting it through the board and getting their consent.

tdlawyer :

As there are 2 of you this means your deadlocked.

tdlawyer :

He must continue to pay you as before.

tdlawyer :

You're likely to have a claim against you brother if he does anything to alter that position.

tdlawyer :

You would also be able to wind up the company, by presenting a winding up petition on what we call the just and equitable ground. This means the company can't continue anymore as it's deadlocked on its management.

tdlawyer :

I doubt he would want that, by the sounds of it?

Customer: I think that would be the last thing he would want! You have been very helpful, thank you. Any further advice??
tdlawyer :

I think you need to negotiate a solution really. Usually, one buys the other out, but the final step if to close it down and both of you to start again.

Customer: Obviously, I can't start again and I doubt if he could afford to buy me out!!
tdlawyer :

Then he has to continue to allow you to be paid dividends as you are entitled to.

tdlawyer :

If he doesn't like it, then he would have to end the company completely.

Customer: Okay tony, thank you for all your help
tdlawyer :

Thank you. I wish you the very best. Take care.

tdlawyer, Lawyer
Category: Law
Satisfied Customers: 1096
Experience: 11 years experience of general practice.
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