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Ash
Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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Hi There, I am a small business owner which was set up November

Resolved Question:

Hi There,
I am a small business owner which was set up November 2013 and have a business partner with 50% share each in the company. Even though there is more than enough money to cover next two months expenses and plus £4000 more on top, she still insisting that we should not pay back the money yet to ourselves (£1000 each month) the money we landed to the company when we first set up. My business partner has no money problem and does this as a hobby whereas I recently separated from my partner and I've been borrowing money, using credit cards to pay my rent and living expenses.
ps: it is an interpreting service where we invoice companies/organisation at eh end of every month and get paid for raised invoices within 4 weeks. We make roughly £4500 profit after all expenses and now have about £14,000 in the bank as a pure profit. Our monthly expenses are around £6000 and we raise invoices around £11,000 - 12,000 a month.
Can you please advise what is my rights as an equal business partner. There is no board and no one else working for us in the office.
Submitted: 2 years ago.
Category: Law
Expert:  Ash replied 2 years ago.
Alex Watts :

Hello my name is ***** ***** 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 as this is not an ‘on demand’ live service, but rest assured I will be giving your question my immediate attention upon return. There is no need to wait here, you will get an email when I reply.

Alex Watts :

Is it a Limited Company?

Alex Watts :

Was it ever agreed it would be paid back in this fashion please?

Customer:

Hi Alex,

Customer:

it is a Limited Company

Customer:

and it was agreed that it would be paid back once we start making profit

Alex Watts :

Is there a shareholder/director agreement please?

Customer:

also she does not agree to pay minimum salary from the profit and I am facing homelessness at the moment if I cannot pay my rent for this month which is due in couple of weeks

Customer:

no there are no written agreement of any sort

Alex Watts :

Was it discussed when you would get payment back?

Customer:

as I mentioned above, we discussed at the beginning of the partnership and agreed to pay back the loan when we made enough profit

Alex Watts :

But no date etc?

Customer:

no

Customer:

because we didn't know at which point we would make profit but since the beginning we are making small profit every month

Alex Watts :

Ok - its bad news then I am afraid.

Customer:

oh no!

Alex Watts :

Unless it was agreed that a certain date would be reached and then you would get payment, or when you achieved a certain turnover then you cant demand payments

Alex Watts :

The same if you had a Directors agreement, if that had set out how and when you would have been ok

Alex Watts :

But you have no agreement whatsoever in force

Alex Watts :

Therefore you can't demand payment

Alex Watts :

All I can think you do is sit out until the AGM and ask for payment in terms of dividend

Alex Watts :

But sadly you can't demand payment otherwise as there is no mechanism or agreement in place

Alex Watts :

I am sorry if this is not the answer you are after and certainly not the one I want to give you, but I have a duty to be honest

Alex Watts :

Can I clarify anything for you about this today please?

Customer:

just thinking... there must be a way as I am the 50% shareholder where I am way due a salary. isn't there any way at all?

Alex Watts :

No, there is not

Customer:

what would happen if I inform her and than transfer £1000 into my personal account?

Alex Watts :

There is no Directors agreement

Alex Watts :

You are not entitled to a salary unless previoulsy agreed

Alex Watts :

You can't just take £1000 from the Company.

Alex Watts :

It belongs to the Company and not you

Alex Watts :

Its not your money

Alex Watts :

I am sorry

Customer:

it looks like, I'm in serious trouble... Thank you so much for your help

Alex Watts :

I am sorry its not better news

Alex Watts :

If this answers your question might I invite you to rate my answer

Alex Watts :

If you need more help or the system wont let you please do say

Customer:

Thank you it does answer my question.

Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience: Solicitor with 5+ years experience
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