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Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3613
Experience:  Solicitors 2 years plus PQE
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i am in a buisnees 50% share holder since april 2014 i did

Resolved Question:

i am in a buisnees 50% share holder since april 2014 i did not invest anything into the buisness but have helped the business throughout the time also i am the licencee of the buisness i now want to get out of the business what can i do
Submitted: 2 years ago.
Category: Law
Expert:  Alex J. replied 2 years ago.
Alex J. :

, Thank you question and welcome. My name is ***** ***** I will assist you.

Alex J. :

Is this a limited company?

Customer:

yes

Alex J. :

, Thank you. Do you have a share certificate shares?

Alex J. :

and accordingly do you have a shareholders agreement?

Customer:

not sure to be honest we are registered at company house thats what i mean by 50%

Customer:

i think there is a share holders agreement as we needed this pub

Alex J. :

- Thank you. If you want to leave then really you need to sell your shares - will the other shareholder buy your shares from you?

Alex J. :

I suspect if you have a shareholders agreement it will contain pre emption rights and you wont be able to sell them to a third party?

Customer:

well like i have said i did not invest anemone into the company my ex partner invested money to buy it . but i have been in the buisness since april when we first started the company and want to know what i can get legally or what is owed to me

Alex J. :

, Thank you. You are only legally entitled to something, if you have a shares in the company and there is someone that wants to buy them.

Alex J. :

If you are leaving you need to have your business partner buy you out.

Customer:

so basically i am not entitled to anything if i just leave what about goodwill

Alex J. :

A company is a distinct legal entity and owns the assets in the business. You own the company by your shareholding.

Alex J. :

You will still own your shareholding when you leave, but it is only worth something if someone is prepared and able to buy them.

Customer:

sorry i am a bit slow so by having a company registered i am a share holder and entitled to 50% not that i want 50% just what i am entitled to

Alex J. :

Did you have an employment contract?

Customer:

no we are buisness partners

Customer:

we have signed a contract to say we are joint

Customer:

everything is going banking company house

Alex J. :

, Thank you. Does the company have any money in its bank accounts? i.e profits made

Customer:

not a lot at the moment but it fluctuates my buisness partner does all the banking so i do not know what we have plus money from the buisness has bought items buisness

Alex J. :

, Thank you. The limited company is the business, therefore the only way to get money out of it, is if a dividend is declared, the company so sold or your partner buys the shares.

Alex J. :

If you want to protect your position I would start by making sure you have share certificates.

Customer:

how do i get share certificates

Customer:

and last question do you automatically get share certificates when you register at company house

Alex J. :

, Thank you. Are you a director of the company?

Customer:

yes

Alex J. :

The share certificates need to be issued by the directors -


www.companywizard.co.uk/resources/share_certificate.aspx this is an example of a template.

Alex J. :

You just need to agree with your fellow director to issue each other certificates.

Alex J. :

I would then start having a dialogue about whether your partner can buy you out?

Customer:

my partner will not do that now i am wanting to leave

Alex J. :

, Thank you. That would be a silly approach to take because if they ever sell then they will have to give your half of the share in the business. You will be able to deadlock the company with a 50% share. Even if you leave (subject to what the shareholders agreement says) you can remain a director and shareholder - which could make life difficult partner.

Alex J. :

What do you think your share is worth?

Customer:

not sure but only want enough to get out as not really interested in taking money from my buisness partner even though we are going different ways

Customer:

buisness bought ,000 just want £20,000

Alex J. :

, Thank you. To take any money out the business you will need your partners agreement. What about selling your shares and agreeing a payment structure over the course of a year - the money to be paid out of company profits?

Customer:

ok will try that thank you again adice

Customer:

advice

Alex J., Solicitor
Category: Law
Satisfied Customers: 3613
Experience: Solicitors 2 years plus PQE
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