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Ash
Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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We set up a limited company 1year ago with all 3of us being

Resolved Question:

Hi
We set up a limited company 1year ago with all 3of us being directors.
Our company has a 50% 25%25% shareholder state.
Now the partner with 50% wants to use the break close and find a way out.What are our options to keep it going.Its a small cafe/patisserie.
Submitted: 1 year ago.
Category: Law
Customer: replied 1 year ago.
Me and my partner (in life as well) has 25%+25% share in the company
Expert:  Ash replied 1 year ago.

Hello my name is ***** ***** I will help you.

Do you have a shareholder agreement please?
Alex

Customer: replied 1 year ago.
I assume we have,but not sure where is it at the moment.
Expert:  Ash replied 1 year ago.

What does it say about termination please?

Customer: replied 1 year ago.
Our partner claims it has a break close of 18 month to terminate
Customer: replied 1 year ago.
But we not willing to terminate as he is a silent partner and we work physically in this business day in day out
Expert:  Ash replied 1 year ago.

Ok - but what does the contract say about it?

Customer: replied 1 year ago.
As I said I don't have a copy available,he has
Customer: replied 1 year ago.
We want to protect this business and happy to buy him out
Expert:  Ash replied 1 year ago.

Ok - can you get it?

Customer: replied 1 year ago.
No I'm afraid.
Is there any general law -advice we can go by?
Expert:  Ash replied 1 year ago.

Its hard - it depends on what is in the contract.

If it says he can leave then he can - it makes no difference if he is a silent partner, unless the agreement makes reference to that.

So in short if the contract says he wants out then you can.

You also need to check to see what it says about buying someone out - I am sure you can. The business just gets valued and his share purchased.

But you need a copy of the contract - just ask for a copy.

Can I clarify anything for you about this today please?
Alex

Customer: replied 1 year ago.
Ok so he wants out and he can leave...but we want to carry on ...what our options are?
Expert:  Ash replied 1 year ago.

You can carry on, depending on what is in the contract.

You can just buy him out - as I said above, get the business valued and buy his share.

That is all you need to do.

Does that clarify? Alex

Customer: replied 1 year ago.
Can he deny from selling on to us?
Can we go to court?
Expert:  Ash replied 1 year ago.

No, he cant refuse and yes you can go to Court if necessary

Does that clarify? Alex

Customer: replied 1 year ago.
We run this business
Customer: replied 1 year ago.
Can we have a say who buys it?
Expert:  Ash replied 1 year ago.

Yes I understand that. No - unless its in the contract that you can.

Does that clarify? Alex

Customer: replied 1 year ago.
Can we seek justice in any legal form??
Customer: replied 1 year ago.
Also can he seize the business without our consent?!
Expert:  Ash replied 1 year ago.

Only as per the contract, which is why you need it.

Yes he can have out. You can buy it.

Otherwise unless its in the contract, you cant say who he sells it to.

They are his shares, he can dispose of them how he wishes - unless the contract says otherwise.

If you wanted it they could only be sold to you, or you could say who they were sold to - that should have been in the contract.

Can I clarify anything? Alex

Customer: replied 1 year ago.
Can he siezes the business without our consent?
Customer: replied 1 year ago.
We are worried
Expert:  Ash replied 1 year ago.

No. Alex

Customer: replied 1 year ago.
Who should we seek legal help for battling to buy his shares?
Customer: replied 1 year ago.
This business is our daily bread
Expert:  Ash replied 1 year ago.

Not yet - only if he refuses and you MUST have a copy of that contract. Alex

Customer: replied 1 year ago.
Worst case scenario he denying us from buying,and that's clearly his intention...who can we turn to?
Customer: replied 1 year ago.
Sorry but we preparing for the worst to come
Expert:  Ash replied 1 year ago.

Then you could turn to the Courts. Alex

Customer: replied 1 year ago.
What courts exactly? We are not familiar with any
Expert:  Ash replied 1 year ago.

County Court. Alex

Customer: replied 1 year ago.
On what terms?
Customer: replied 1 year ago.
can he quickly sell it on in the Meantime??
Expert:  Ash replied 1 year ago.

If he refuses to do it and bullies you. He can only sell if the contract allows.

I keep coming back to this - you need the contract. Alex

Customer: replied 1 year ago.
basically we need to gather evidence that our clear intention to buy it off from him on first basis ?
What if he is plotting already?
Expert:  Ash replied 1 year ago.

You dont know that. You need the contract.

You cant really do anything without knowing whats in it.

Does that clarify? Alex

Customer: replied 1 year ago.
Ok
What then if we don't have a written contract..as I don't remember signing any
Customer: replied 1 year ago.
We have a Company House statement of shares
Expert:  Ash replied 1 year ago.

If you dont have the contract then he can sell to whoever he wants to.

You cant stop him

But if you want his shares you have to value and buy them

If you cant afford it he can sell to whoever.

Alex

Customer: replied 1 year ago.
there is no way stopping him? let's say we got the founds to buy him out asap?
Expert:  Ash replied 1 year ago.

No - because you dont know what is in the contract.

You NEED the contract above anything else. That says what you both CAN and CAN NOT do.

Alex

Customer: replied 1 year ago.
Thank you for your help
Expert:  Ash replied 1 year ago.

If I could invite you to rate my answer before you go today please, otherwise the site does not credit me for the time spent with you today. Thanks and good luck. Alex

Customer: replied 1 year ago.
Sure,no problem
I would appreciate it if I didn't have to ask all small details over and over again
It was painful to draw out answers from you to be honest
Expert:  Ash replied 1 year ago.

Thank you for your feedback. If you remember right at the beginning I did say it would all be down to the contract.

I hope this helps. Alex

Customer: replied 1 year ago.
I paid enough for this service to find out our options for all the scenarios.
Expert:  Ash replied 1 year ago.

Ok - if you could rate so the site credits me, otherwise they dont! Thanks in advance. ALex

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