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Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3493
Experience:  Solicitors 2 years plus PQE
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A family member set up a transport company circa 2001. He

Customer Question

Hello, a family member set up a transport company circa 2001. He asked me to buy a minibus and join him, it would work that he would get the work and sub-contract it to me. His future plans were to set up as a franchise and get more people on board. I was first to join him in 2003, I bought a vehicle for £38k, I was also a Director as he was bankrupt at the time, for this he gave me 10% shares in the business, he and I didn't have a contract.
I have honoured a contract (shuttle bus service) for him for 10 years using my bus, using my drivers and having all the associated costs of a business and I paid him 10% of the turnover. On Thursday 15th July 2016 I was given notice until the end of the month as he was taking the work back, he then asked what I wanted to do, work for him, he could buy the bus off me (which he has since said he's not buying). I have had £84k's worth of annual work taken from me, leaving me with nothing, surely this is not legal. He said at the moment the company is only making money on the shuttle so he wants it, as the company has been valued at £800k, in 1 year it will be worth £1.2m, then my shares will be worth £120k, however I have yet to see a dividend!
Please can you advise if I have any legal rights
Submitted: 4 months ago.
Category: Law
Expert:  Alex J. replied 4 months ago.

Hi, Thank you for your question and welcome. My name is ***** ***** I will assist you. Do you have proof of ownership of the shares? Are there any other shareholders? Are you still a director? Kind regards AJ

Customer: replied 4 months ago.
Hello Alex, I am no longer a Director, there are other shareholders. At the moment I cannot put my hand on the share certificate I think I may have filed in to old accounts, what I do have is plenty of references to it in minutes and a fax to a company. This would also be evident in the submitted accounts? Reading the minutes I was given 10% shares to come on board to the business and was completely unrelated to him being bankrupt and me becoming a Director.Kind regardsSue
Expert:  Alex J. replied 4 months ago.

Hi, Thank you. Unfortunately the first point to note is you cannot force a dividend payment - if you have the same class of share and dividend was declared and approved by ordinary resolution you will be entitled to it. Do you know whether a dividend was ever declared. Do you actually want to carry on working for/with this company? Is selling your shares an option?

Customer: replied 4 months ago.
I have no idea who would buy the shares. I have no idea if a dividend has ever been paid, I have never received one. Working with this company isn't an option remaining in my own company as a franchise, he has terminated the set up we had.My question is is it legal to terminate our franchise? Is it legal to withdraw 100% of my income? Do I have any legal rights to the shuttle contract that I have been honouring for the last 10 years?
Expert:  Alex J. replied 4 months ago.

Hi, Thank you. The agreement is a contract, and potential he may have the right to terminate. Technically you were not an employee and you were a supplier of the company and the company was therefore entitled to terminate this arrangement at any time. There is not much you can do about this part. Was the work with one particular client? Kind regards AJ

Customer: replied 4 months ago.
the contract was with one client which he provided the service to for around ten years
Expert:  Alex J. replied 4 months ago.

Did you have any direct contract with the client? Kind regards AJ

Customer: replied 4 months ago.
No queries from the company came through the family member. Also I invoiced him and he paid me, it wasn't direct through the shuttle company
Expert:  Alex J. replied 4 months ago.

Hi thank you. The only claim you can feesibly make is on the grounds you were actually an employee and have been made redundant. Were you paid net of tax and national insurance? Kind regards AJ

Customer: replied 4 months ago.
Nope. I invoiced them for the work carried out less 10% commission. I am an employee of my own limited company where I pay tax and NI
Expert:  Alex J. replied 4 months ago.

Hi thank you. Did you invoice them monthly for the work? You may be able to argue that after ten years they need to give you a reasonable notice period before terminating. The problem is without a contract there is not much you can do to enforce the supply the customer. You could approach the customer directly?

Customer: replied 4 months ago.
I think this has concluded all I need to know. Thanks for your advice. Was this service £37?
Expert:  Alex J. replied 4 months ago.

Thank you. I am afraid I have no control over payment or pricing of the service this is controlled by the site administrators. Do you want me to refer the question to them for any queries regarding payment? In the mean time any feedback is gratefully received. Kind regards AJ

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