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Matt Jones
Matt Jones, Solicitor
Category: Law
Satisfied Customers: 671
Experience:  I am a qualified and practising Solicitor with over 7 years post qualification experience
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I have sold my 50% share of a business back in May 2014 with

Resolved Question:

I have sold my 50% share of a business back in May 2014 with a witnessed sale agreement in place signed by both parties.
the agreement stipulates strict payment schedule as some monies were to be paid to me in instalments.
the other party has not adhered to these payments and the agreement states that ALL payments should be made no later that the 1st January 2015. the final payment has not been made. they state bank errors for first time and last payment they refuse to pay.
the agreement also stipulated that I was to remain as 50% shareholder and company director until monies were paid, however I have learned that I was removed as director and from my shareholding a week or so after the contract was signed, long before I was paid in full as agreement states.
my questions are -
1) can I declare the contract null and void as the other party has clearly breached it?
2) the contract states that the company Van and one piece of equipment remains under my title (I take ownership) until all monies are paid. can I take the van (its in my name as registered keeper)
3) if agreement Null and void, can I approach the customers from the company I sold if I am no longer bound under the agreement not to? as I now own a competitor company (setup before sale and known to other party) No territory boundaries were in contract, just I was not to approach theirs
any help much appreciated.
Submitted: 2 years ago.
Category: Law
Expert:  Matt Jones replied 2 years ago.
Matt Jones :

Hi I wil try and help

Matt Jones :

In the first line of your question you say that you sold 50% of your business, does that mean you retain the other 50% regardless of what happens?

Matt Jones :

Also who much is is owed to you, and why have they refused to pay you the final payment?

Matt Jones :

was this agreement drafted by a lawyer?

Matt Jones :

you have to sign a stock transfer form to exchange your shares, did you do that, and if so shy did you do that beore you received all of the payments?

Customer:

hi

Customer:

I sold my share so the third party had 50% now they have 100% basically forced me out but that is a long story

Customer:

I believe they owe me approx. £700

Customer:

the agreement was not drafted by a lawyer, however it was agreed by both parties before it was signed. it outlines the payment schedule, title of goods and that I would resign my directorship and relinquish my shares once payments in full are complete.

Customer:

no I did not sign a stock transfer form - this was to be done once I had been paid. I would send this form and relinquish the securities I had against the company van and one piece of equipment.

Customer:

its seems they logged on to companies house online systems and just removed me - not sure the process but I think you can just delete a director from the companies house website

Matt Jones :

a director yes, but how have the transferred your shares?

Matt Jones :

(In fact you probably want to be removed as a director to prevent ongoing liabilities)

Customer:

not sure to be honest im not that familiar with the process of shares etc

Matt Jones :

so is it possible they haven't transferred your share? Do you still have the share certificate?

Customer:

not sure sorry - it was all setup on line at CH just setup two directors with 50% shares each

Matt Jones :

Ok, fair enough.

Matt Jones :

Well lets say for the sake of argument you have the shares still in your name, because without your signature on a stock transfer form they cant be transferred (unless they have forged your signature but then we are in a whole different area). You are therefor entitled to a dividend of the profits, to attend AGM, for copies of the accounts etc, etc. This makes you to much a nuisance for them to NOT pay you the £700, You just have to make sure they know this. As to the vehciel this is obviously a good bargaining chip.

Matt Jones :

As to whether you can declare the contract null and voidn

Matt Jones :

on balance probably not. There would have to be a specific clause in the contract to this effect. it s more likely a Court would consider you are allowed to sue for the £700 but that the non payment was not "fundamental" enough for the contract to be voided

Matt Jones :

Does this help?

Matt Jones :

please ask any follow up questions

Customer:

I think so

Customer:

what would I say regarding the shares as im not that familiar as said? what can I force them to do?

Matt Jones :

You just have to write to them and remind them that the shares are still in your name and that, whilst things are as they are, you expect to receive your share of profits, attend annual meetings and get copies of the accounts. If they want your share they have to pay you the £700

Customer:

I don't think they are equally familiar with shares etc - if I say I am entitled to dividends etc being a 50% shareholder have I the power to determine the dividend amounts etc?

Customer:

sorry you must think me dumb but its only a launderette and we were advised to be a limited co.

Customer:

what form would I have to send to transfer me shares? could the accountant transfer my shares (as I think they got him to do it) or as you said would it need my signature?

Matt Jones :

the dividend is 50% of the profits. Simple as that. In order to determine that you need to see the accounts (or get them looked at by an accountant). The final issue here (I suspect) is to get the £700 and, anything else you are owed, and walk away, and so what I am giving you are the best arguments possible to persuade them that they should stop messing about and pay you (and no i do not think you are dumb :))

Matt Jones :

the form used for transferring shares is called a "stock transfer form". You can get them on line, or from your accoutant

Customer:

could he have transferred my shares at their request?

Matt Jones :

no, your signature is required

Customer:

if they have somehow forged my signature they ill presume that's fraud?

Matt Jones :

Yes, it would be

Customer:

so in a nutshell write to them - if they don't pay they legally have to pay me a dividend of 50% of profits or I could sue them for the share of any profits if not paid?

Matt Jones :

correct

Customer:

perfect thanks Matt for your expert knowledge - ill leave good feedback Jason

Matt Jones :

you are welcome.If you are happy please click to leave me positve feedback so I can be paid for my time tonight. the questions wont close and you can revisit this later to ask any additional questions if you need to. All the best and good luck with everything

Customer:

will do thanks

Matt Jones, Solicitor
Category: Law
Satisfied Customers: 671
Experience: I am a qualified and practising Solicitor with over 7 years post qualification experience
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