Could you explain the background detail to this please and the problem in depth?
I was with the client when the telephone request came in.
It should have now cancelled. If you contact admin, they will refund you.
I can only answer you based upon English law.
If there is no partnership agreement, then the partnership is governed by an piece of legislation, the Partnership Act 1890
In it, there is no provision for retirement or death and no provision for holidays what happens if the partners put an equal amounts of investment into the business.
Hence, profits would be split 3 ways in this case regardless of what capital each partner put into the business and regardless of what effort each person put into the business.
There is no obligation to put any money into a business partnership unless there is an agreement directly saying what needs to go in.
Are you able to attach a copy of whatever agreement you have with regard to the initial investment, the shares and the further 18%?
The reply is a response to your question about whether the partner leaves to provide funds to obtain the mining licence.
I talk about money going in and money going out.
The penultimate sentence says “there is no obligation to put any money into a business partnership unless there is an agreement directly saying what needs to go in”
you can attach the document on here and I will be able to read it once it arrives.
In English law, a memorandum of understanding is not binding. It is just what it says, a memorandum of understanding. There is case law on that.
This memorandum has been very badly drafted you might want to go back to whoever drafted it for you advised your it in the first place.
The memorandum of understanding would form the basis for an agreement between you which would be a formal partnership agreement if it was a partnership.
However now, having seen the document, it is not a partnership but a limited company and hence you don’t need a partnership agreement you need a shareholders agreement and a directors service agreement.
Clause 3 of the Memorandum for some reason it does say mining lease/licence rather than a lease and a licence which are two separate things.
It refers in that clause to JK having the liability, but there is no mention anywhere in this memorandum who JK actually is. The first reference I can see JK is in clause 3 but it still doesn’t say who JK is.
It also doesn’t help you is in the beginning of clause 4 it quite clearly says that the proposed Joint Venture is conditional on a whole load of things and is no mention of whether any of those have been satisfied.
I’m sorry to say but I don’t think this document is enforceable because it’s a mishmash of disjointed phrases and obligations. As I said earlier, I would go back to whoever drafted it with a view to bringing a negligence claim against them if you can’t get the issue resolved properly.
Can I clarify anything else for you?
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In my opinion, the memorandum is not enforceable. If it was an agreement rather than a memorandum of understanding, I think it would do exactly what you are looking for an enforceable. However there is a fundamental difference between the documents as you will see here in the second paragraph
If it isn’t enforceable one way, then it is not enforceable the other.
Hence, if he argues that it’s not enforceable then he doesn’t have to pay anything but you get your shares back.
If however you have transferred the shares are already, there is clearly an agreement between you albeit not this one.
What you then have is a verbal or informal agreement, the terms of which are not written down.
Whilst you would not be relying on the Memorandum itself in the terms of an agreement, what you would then be doing is relying on it is evidence of what the informal agreement was.
You transferred the shares and he must pay the money.
If you had not transferred the shares and didn’t want to, it is unlikely that he could make you even if he wanted unless he produced the lease and the licence.
I am familiar with the difference. The lease gives you the land but doesn’t give you the right to mine it. What you need once you have the land is the licence to mine.
What should happen is that the transfer of shares should be conditional upon the lease under the licence. It is a three-way thing.
If he will not provide further funding in respect of the licence, and he has the shares, you are entitled to sue him for the extra funding which he has committed to using the memorandum as evidence of what was agreed.