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Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3844
Experience:  Solicitors 2 years plus PQE
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I set up a business with my former partner from inception to

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I set up a business with my former partner from inception to the start of trading, a period of approx. 2 years, after which we split up as he was unfaithful to me and decided he no longer wanted to be involved with me in the business or otherwise. I did most of the set up, dealing with most issues from office building design to computer infrastructure. It was my contact that allowed the company to obtain Essex county council contracts. I did not and have not received any remuneration. I have documentary evidence in the form of emails to consultants, suppliers etc. I was verbally repeatedly promised a 50% shareholding once trading began, but this has not happened. Am I legally entitled to claim a 50% shareholding in the company?
Hi. Thank you for your question and welcome. My name is ***** ***** I will assist you. Do you have any emails promising the 50% shareholding? Did you ever vote on any company matters? Could you actually work in the company going forward if you did receive the shares? Kind regards AJ
Customer: replied 2 years ago.
I do not have any emails promising me the 50% shareholding only my handwritten notes on the company structure. Yes I did vote on all
Company matters although it is an owner managed business there was no official voting as such but I did make most decisions and yes I could work in the company going forward, I am an accountant by profession.
Customer: replied 2 years ago.
I set up all the systems in the company and the paperwork
Customer: replied 2 years ago.
and was involved in the day to day running including staff training, recruitment, staff management, internal accounting and bookkeeping, payroll, year end accounting, customer facing etc.
Customer: replied 2 years ago.
I was forced out of the business last July 2015
Hi, Thank you. To summarise, you were promised sweat equity (shares) in return for your contribution. Lets assume you cannot go back to the business, on that basis do you want a payment in lieu of your services or the value of the shares? Do you have any idea as to what this payment should be?
Customer: replied 2 years ago.
In all honesty I would want the shares promised me and not a payment in lieu. It took me two years to set up everything. The company has only been trading for 1 year, I have no idea of share value
Customer: replied 2 years ago.
Am I entitled to sue for the shares promised to me ?
Customer: replied 2 years ago.
if I did sue for the shares would I be successful with my claim?
Customer: replied 2 years ago.
I don't want to go back to the company but want the investment that was promised to me so I can claim dividends and share in profits
Hi, Thank you. Potentially you could sue for the shares, is the other party still 100% shareholder? The problem is if you owned 50% of the company you would have to take responsibility for the management of it otherwise the company would be deadlocked. Do you know whether the company is currently profitable? If you forced the issue and were given shares would the other party continue to work with you? Kind regards AJ
Customer: replied 2 years ago.
Hi yes the other party is still a 100% shareholder and the company is profitable. I would be happy for the other party to continue with the management of the business and only be involved in major decision making. I think the other party would have no choice but to work with me. They may not be happy with it but I'm sure would learn to live with it.
Hi, Thank you. If they wont voluntarily give you the shares you will have to sue for them. As a starting point do you have evidence to show the time and effort you put into the business? Emails or times sheets etc? Kind regards AJ
Customer: replied 2 years ago.
Hi yes I have documentary information in the form of emails
Hi, Thank you. If you wanted to sue for the shares then you would need to show:(i) It was agreed that you would get the shares as sweat equity;(ii) You actually did the work.Obviously you did not do the work for free - therefore if you can prove you actually did the set up work this could be grounds to claim the shares. When you initially wrote to the shareholder demanding the shares what response did you receive? Kind regards AJ
Customer: replied 2 years ago.
I haven't made any requests to the shareholder for the shares. The shares were promised to me verbally but I do not have a formal written agreement to this end. I do have documentary evidence in the form of emails that I set the company up. Would this be enough to substantiate my claim for shares in the Company?
Hi, Thank you. Yes this can be used as evidence to show you did the work in exchange for effective "Sweat Equity" i.e the shares were to be remuneration for your work. As a starting point before you sue for the shares, you have to make a written demand that they be transferred into your name.
Customer: replied 2 years ago.
Hi do I have to do that in the form of a personal letter or can the demand for shares come from a solicitor?
Hi thank you. You can personally send her a letter warning that if she does not send the shares you reserve the right to take legal action. Sending the demand from a solicitor will give it more gravitas and she is less likely to ignore if she thinks you have been professionally advised. Has she been ignoring you to this point? Kind regards AJ
Customer: replied 2 years ago.
Hi, I sent him an invoice last October and yes it was completely ignored and has been ever since. What percentage of the shares can I look to claim back, I was hoping it would be 50%. Can I back date my claim to last year when the company started trading?
Hi, Thank you. Your claim should be from the date the shares were supposed to be transferred to you. If you were promised 50% of the issued share capital, then this is what you should claim. If your demand was ignored, then I would send the next letter from a solicitor and say if the shares are not transferred you will considered suing them? Kind regards AJ
Customer: replied 2 years ago.
Hi, thank you very much for your help
Hi, If I can assist any further please do not hesitate to contact me. Any feedback is gratefully received. Kind regards AJ
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