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Ask Michael Holly Your Own Question

Michael Holly
Michael Holly, Solicitor
Category: Law
Satisfied Customers: 6545
Experience:  I have 20 years of experience as a solicitor in litigation and other areas
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Hope you are well. I have an issue and feel it is more

Customer Question

Hello, hope you are well.
I have an issue and feel it is more complex than a usual case given how the business was funded, i will try to paint a good picture.
I started a business at university making tie dye but had huge aspirations for importing stock from Asia and eventually selling online and at festivals. I had relatively small success but a serious lack of funding so i eventually moved on.
My at the time best friend for 15 years, whom has a very very rich dad, decided he wanted to do this business with me. May i stress at this point that he's never worked a hard day in his life, his outright paid for his own house, car, gives me £250 a week pocket money, etc, etc the list goes on.
So his dad gifted the business £25,000 and we both owned 1000 shares each and are both directors.
Things went south fast and he obviously dropped the ball very early on and i was picking up all the slack. My other business was doing considerably better and we had numerous fallouts out over how to spend the money, my being business minded and him not so.
We have not spoken in months and he assures me someone his dad knows is 'taking care of everything'... in regards ***** ***** this business down.
Now, i do not believe they can close this without my input?
I worked hundreds of hours unpaid for this business assuming we would never fall out, now its gone sour, am i really entitled to nothing now?
There is £11000 still in the business account and probably £2000/£3000 worth of assets.
please help me as i know he will never sort this out and before i know it the accounts will be overdue and it will cause me even more problems.
Thanks
Lee
Submitted: 7 months ago.
Category: Law
Expert:  Michael Holly replied 7 months ago.
Most people who have become are either fortunate or astute or both.I think you will find that the "gift" of £25,000 to the company is being presented as a loan by the father to the company which will make him a creditor of the company. The loan lone exceeds the assets of the company so it is insolvent, meaning it cannot pay it debt's debts. The shares would be worth nothing. If were employed by the company as well as being a director you could claim owed wages but you would have to show you were employed by producing a contract and details of wages owed.As such I am afraid it does not look too promising.If there are any further points please reply and I will respondBest wishesMichael

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