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JGM
JGM, Solicitor
Category: Scots Law
Satisfied Customers: 10099
Experience:  30 years as a practising solicitor.
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I am a 50% shareholder and director of a company. My

Customer Question

I am a 50% shareholder and director of a company. My ex-partner is the other 50% shareholder and director. I have been running the company for the past 6.5 years while he was concentrating on his other business interests. He now decided to get involved in the business and has created chaos - upset a number of key staff who left, employed other staff who have not been trained and are threatening to leave, etc. However, when problems arise, he refers them to me, as I'm the one with knowledge as to what to do. Essentially the expectation is that whatever he does I have to sort out the mess (he doesn't know how). Clearly if I don't it's going result in problems for the company. I have asked him a number of times to define what our duties and responsibilities are in the company, to split them (as there are many) and to agree to a basic level of income we should both get from the company (i.e. wages, consultancy or other). He avoids these questions (i.e. does not reply), expect me to pick up the pieces when things go wrong (which they do a lot). Can I make him (by taking him to court or other) agree on the basic split of duties and responsibilities in the company so that we don't step on each other's toes and don't expect the other one to sort out the mess we create, as well as to agree on a basic remuneration (I have no other income and he controls the bank account)? Thank you.
Submitted: 2 months ago.
Category: Scots Law
Expert:  JGM replied 2 months ago.

No, if he isn't going to do this voluntarily a court isn't going to run the company for you. You should try to negotiate a shareholder's agreement and directors service agreements and stick to them. If that isn't possible then you have one option only. That is to apply to the sheriff court to have the company wound up on the statutory ground that it is just and equitable to do so on the basis that you can't work with each other. You would have to start up a new company on your own and hope that you can transfer the customers over. Assuming there is no contract to say otherwise there is nothing to stop you moving to another business of your own and taking the custom with you. I hope that helps. Please leave a positive rating so that I am credited for my time.

Customer: replied 2 months ago.
Hi,
Thank you, ***** ***** isn't really helpful. Of course I've been trying to negotiate, but he is not responding in a constructive way. The company in question is a hotel so I can't wound it up and set it up somewhere else, there is the building and the people working for it. Wounding up would just mean end to the busines, which took me 6.5 years to build. If people can solve disputes such as who is cutting the hedge in their garden, in court, surely it should be possible to solve something like that?
Expert:  JGM replied 2 months ago.

If have 50% shares then, no, you either have to sort it out between you or go your separate ways. That may not be what you want to hear but that is the way it is.

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