How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Ash Your Own Question

Ash
Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
75100385
Type Your Law Question Here...
Ash is online now

I own 1/3 of an LLP. The other 2 partners want to take the

Customer Question

I own 1/3 of an LLP. The other 2 partners want to take the business in a different direction which requires the partners putting up personal guarantees which I am not in a position to do and they are. They have asked me to relinquish 23.3% of my share in the company and to keep 10% share and all of my cash in the business. I am not happy with this and would prefer to walk away than be left with just 10%. The current partnership agreement states that no partner can leave before july. They are telling me that if i do not agree to this they will just set up a separate company to do what they want to without me involved. What are my rights here?
Submitted: 3 years ago.
Category: Law
Expert:  Ash replied 3 years ago.

Alex Watts : Hello my name is XXXXX XXXXX I will help you with this. Please note that I am a working Solicitor and may be on and offline as I have to attend Court and meet with clients, even at weekends. As such you may not get an instant response when you reply, but rest assured I will be giving your question my immediate attention upon return You do not need to wait here as you will get an email when I reply.
Alex Watts : Is there a non compete clause in the agreement p,ease
Alex Watts : please?
Customer:

Hi, there is not a non compete clause in the agreement - I have attached the current partnership agreement.

Attachment: 2014-03-16_124353_general_partnership_agreement.pdf

Full Size Image

Alex Watts : You don't need to worry. They can't make you sign a PG and can't make you leave.
Alex Watts : They can only dissolve it as per the agreement.
Alex Watts : If they try and set up a new partnership doing the same thing and taking the business you could seek a court order to stop them.
Alex Watts : There is an implied term by law of good faith.
Alex Watts : Therefore they need to act in the best interests of the partnership. If they do not then you can sue and take action.
Alex Watts : Can I clarify anything for you about this today please?
Customer:

What do you mean by an implied term by law of good faith? What is the good faith in this case?

Customer:

I am also concerned as they are not actually asking me to sign a PG or leave but what they are doing is effectively forcing me to give up 23% of my share. What happens if they then do not agree to dissolve the existing partnership?

Alex Watts : They can't force you to give up anything. They can not start another business doing the same thing. You could sue them.
Alex Watts : If they want you out, they need to buy you out, it is that simple.
Customer:

They are proposing to offer a new service - it is in the same industry and very similar to what we currently do but a slightly different product. Would this be considered as doing the same thing?

Alex Watts :

It could be - clearly it would be down to a Judge to decide, but it could be.

Customer:

So I have spoken with them today and it seems that I have misunderstood them. They are now telling me that they are not actually putting up PG's but are investing £75k cash each which they know that I cannot do. This obviously changes things. Where would I stand in this case?

Alex Watts :

It makes no difference - they can't reduce your share or dissolve the partnership.

Alex Watts :

In reality it makes no difference to you.

Alex Watts :

Does that clarify?

Customer:

They have come back to me and said they will just set up another business without me - can I please clarify that, even though there is not a non-compete clause in the partnership agreement, they are not allowed to do this?

Alex Watts :

They are not allowed to -that is correct if it is doing what you are doing now.

Alex Watts :

Does that clarify?

Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience: Solicitor with 5+ years experience
Ash and other Law Specialists are ready to help you
Customer: replied 3 years ago.

Hi, I have gone to the other 2 partners and asked if they could invest the cash as a loan or make me an offer for my shareholdings. They are not willing to do either and have offered me 3 other options:


 


1. We agree to a cash value of the business at today's date and I drop my shareholding down to 10.9% today. In 6 months time I have the option to walk with the cash value if I am not happy with how it is going.


 


2. We agree a 'nominal' value for me to leave. We have not discussed an amount but I have the feeling they will not offer me a fair sum.


 


3. The existing company becomes a property management company for the new business which they will set up if I do not agree and the shareholdings of the existing company stay the same.


 


I am wondering what my options are from here?

Expert:  Ash replied 3 years ago.
They can't force you into anything. If they want you to leave then you need the business valued and then you know what your share is worth.

Alex

Customer: replied 3 years ago.

Thanks. Is there anyway that you are able to prepare a letter or something for me, outlining all of this? I will then present it to them and hope that they will want to settle out of court. Obviously I am happy to pay for that service so if you can do it please let me know how much this would cost! If you are not able to can you recommend anybody who could?

Expert:  Ash replied 3 years ago.
Sadly I am not able to do work or be instructed by you, the site won't let be recommend anyone either,

Site rules I am afraid.

Alex

What Customers are Saying:

 
 
 
  • Thank you so much for your help. Your answers were really useful and came back so quickly. Great! Maggie
< Previous | Next >
  • Thank you so much for your help. Your answers were really useful and came back so quickly. Great! Maggie
  • A quick response, a succinct and helpful answer in simple English. I believe I can now confront the counter party with confidence -- worth the 30 bucks! Rick
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP
  • I couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin
  • Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. Esther
 
 
 

Meet The Experts:

 
 
 
  • Jo C.

    Jo C.

    Barrister

    Satisfied Customers:

    30316
    Over 5 years in practice
< Previous | Next >
  • http://ww2.justanswer.co.uk/uploads/EM/emus/2015-7-7_192327_bigstockportraitofconfidentfemale.64x64.jpg Jo C.'s Avatar

    Jo C.

    Barrister

    Satisfied Customers:

    30316
    Over 5 years in practice
  • http://ww2.justanswer.co.uk/uploads/BE/benjones/2015-12-1_0437_ennew.64x64.jpg Ben Jones's Avatar

    Ben Jones

    UK Lawyer

    Satisfied Customers:

    11553
    Qualified Solicitor - Please start your question with 'For Ben Jones'
  • http://ww2.justanswer.co.uk/uploads/BU/Buachaill/2012-5-25_211156_barrister5.64x64.jpg Buachaill's Avatar

    Buachaill

    Barrister

    Satisfied Customers:

    1754
    Barrister 17 years experience
  • http://ww2.justanswer.co.uk/uploads/JO/jojobi/2013-3-19_0265_maxlowryphoto.64x64.jpg Max Lowry's Avatar

    Max Lowry

    Advocate

    Satisfied Customers:

    894
    LLB, 10 years post qualification experience
  • http://ww2.justanswer.co.uk/uploads/UK/UKLawyer/2012-4-12_9849_F2.64x64.jpg UK_Lawyer's Avatar

    UK_Lawyer

    Solicitor

    Satisfied Customers:

    750
    I am a qualified solicitor and an expert in UK law.
  • http://ww2.justanswer.co.uk/uploads/KA/Kasare/kasare.64x64.jpg Kasare's Avatar

    Kasare

    Solicitor

    Satisfied Customers:

    402
    Solicitor, 10 yrs plus experience in civil litigation, employment and family law
  • http://ww2.justanswer.co.uk/uploads/OS/osh/2015-7-7_19268_gettyimagesb.64x64.jpg Joshua's Avatar

    Joshua

    Lawyer

    Satisfied Customers:

    8199
    LL.B (Hons), Higher Prof. Dip. Law & Practice