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Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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Hi , I am in the logstics business , we buy services from citylink

Customer Question

Hi , I am in the logstics business , we buy services from citylink and sell them on where citylink collected form customers and we make margins per parcels , customer keeps on sending parcels daily and we keep on making profit per parcel.

My friend joined my business and i gave him 50% profit for customers , he worked for 2 years and i kept on giving him profit for 2 years , now he has left and he said that i was suppose to pay him profit for life , I said no , this is my business and i will pay you profit as long as i want to pay you.

We have a basic 1 page contract whcih says that he will get 50% profit in business , its signed by me.

I am the only director and He has bever been the director.

My wife is the only shareholder of the business.

I dont want to pay him more profit and he is threatning me with court claim.

My question is :

Does he has a valid case ?

Can I stop paying him now as i dont want to pay him anymore ?

If he does a case on my company , How long can it take for the decision to come ?

Finally Can I increase my cost price to him for supplying and continue to give him 50% but charge his customers a higher price for supplying , this was i will have to pay him less.

Many Regards ***** *****
Submitted: 3 years ago.
Category: Law
Expert:  Ash replied 3 years ago.

Alex Watts : Hello my name is Alex and I will help you with this. Please note that I am a working Solicitor and may be on and offline as I have to attend Court and meet with clients, even at weekends. As such you may not get an instant response when you reply, but rest assured I will be giving your question my immediate attention upon return You do not need to wait here as you will get an email when I reply.
Alex Watts : Can you upload the contract please?
JACUSTOMER-6lq43zpe- :

Hi It was a basic 1 page Agreement , i have pasted it below , My partners name is Sohaib :

JACUSTOMER-6lq43zpe- :

Agreement is :

JACUSTOMER-6lq43zpe- :


This is what I propose;

1. SAW AJ BROTHERS will be split in the following manner

a. Shafi: 45

b. Soahib:45

c. Ibrar: 10

d. Shares will be issues on the 1st January 2016

2. Prompt Parcels is and will remain 50/50 split between me and you minus taxes and expenses.

3. All of Ibrar’s clients are his and ours and I have no profit in that. But at the same time, he needs to be controlled. If you don’t control him, he will cause more issues going forward and if he causes me issues, I’ll just tell him to f**k off.

4. Faisal is yours, all the profits from him are yours. But no more separate staff in the future.

5. For your food I’m available, I’m not busy, Zubair is available. If he’s busy, Gary is available. If he’s busy, I’; find you someone.

6. Any commitment to UK MAIL, City Link, Hermes, or any other Carrier will be split proportionally as is VAT currently. Prompt Parcels will pay what is due from its side and you and Ibrar will pay the rest.

7. Separate company for your wife is fine. I never had any issue with that. Me and Ibrar will have no shares or anything in your wife’s business.

8. As for AMI OMEGA UK WIDE, we had agreed in August that

a. All Shafi’s client brought before the 1st February 2014 will remain his forever and no profits will be distributed.

b. All client’s brought after the 1st February 2014 will be 50/50 between Sohaib & Shafi and everyone else will get a cut from them, after they have agreed a figure.

c. Customer like (E.g.Sash and Viraj) who start on Hermes before 1st February 2014 will belong to Shafi as agreed and no profits belong to anyone but Shafi.

d. Hermes price is £2.45 for Packets and £2.75 Parcels

9. As for holidays and all the other day to day stuff I will consult you.

Alex Watts :

Does it say anything about termination?

JACUSTOMER-6lq43zpe- :

Nothing about Termination , This is the contract which I have pasted above thats its and his and my signatures , thats all

Alex Watts : Then sadly you can not terminate it. The agreement does not allow you to do.
Alex Watts : He always remains entitled to his share.
Alex Watts : This is because there is no power to end his share, it does not say that in the contract.
Alex Watts : The only way you can do it is buy him out.
Alex Watts : I am sorry if this is not the answer you want and certainly not the one I want to give you, but I have a duty to be honest.
Alex Watts : Can I clarify anything for you about this today please?
JACUSTOMER-6lq43zpe- :

He does Not have a share , So how is he entitled to it ?

JACUSTOMER-6lq43zpe- :

It is said that he will recieve share in 2016 ? so is the contract still storng or is it weak as not he has left the business

JACUSTOMER-6lq43zpe- :

It was said that these shares will be allocated in 2016 , please read sir. also his name is spelled incorrectly and it doest even say % it just says a figure so is he in strength or is their nothing he can stand on as I dont want to pay him anymore.

Alex Watts :

It says Prompt Parcels will remain 50/50 split between me and you

Alex Watts :

IT says that shares will be split

Alex Watts :

Shafi 45

Alex Watts :

Soahib 45

Alex Watts :

Ibrar 10

Alex Watts :

It does NOT say you can end the agreement.

Alex Watts :

Even if you spelt his name wrong does NOT make the agreement invalid

Alex Watts :

The agreement does not say you can end it - therefore you can not

Alex Watts :

I am sorry but this is the legal answer

Alex Watts :

Does that clarify the position?

JACUSTOMER-6lq43zpe- :

Yes But he is Not a shareholder in the company , It is said in Agreement that shares will be allocated in 2016.

JACUSTOMER-6lq43zpe- :

Also I am only the director , I am Not the sharholder , Only sharholder is my wife and she never signed the agreement , Only I signed the Agreement, Is its still vallid ? Does he still gets shares ? Is he still entitled to anything ?

Alex Watts :

Yes I understand that. But you have an agreeing that says he is entitled to x %

Alex Watts :

The shareholder does not have to sign it.

Alex Watts :

You made the agreement on BEHALF of the company

Alex Watts :

If you did not have authority then you should not have acted and he can sue for breach of contract

Alex Watts :

Does that clarify?

Alex Watts :

If this answers your question could I invite you leave feedback on my service which I hope has been excellent today, if you need more information or help then please click reply.

Please remember that I am always happy to help if you have future questions, even if I am in Court I can normally respond within a few hours. For future information, please start them with ‘For Alex W’.

Please bookmark my profile if you wish for future help:

JACUSTOMER-6lq43zpe- :

Last Question and I will Rate your service good? How Long can the case take if he decides to sue me for profits and share , just give me average time for decision to be made ? Also How much will it cost him to sue me roughly ? thanks

JACUSTOMER-6lq43zpe- :

ast Question and I will Rate your service good? How Long can the case take if he decides to sue me for profits and share , just give me average time for decision to be made ? Also How much will it cost him to sue me roughly ? thanks

Alex Watts :

Its hard to say but around 6 months and it would cost around £10,000 to take to Court if contested

Alex Watts :

Does that clarify for you?