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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 am a software developer, five years ago I was approached by a cus

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Hi, my name is Des,
I am a software developer, five years ago I was approached by a customer and asked to develop a piece of software. The software was complex and the client did not have the funds to develop it so I offered to develop it for a shareholding in the company that he had set up. The software that I was developing was the companies sole product.
It was agreed that I would receive 30% of the company. The software has been in constant development for the last five years, many changes have been made, mostly from suggestions that I have made.
Also I subsequently had the idea for a second piece of software which has also been in development for a number of years. The idea was solely my own and I have been the sole developer.
We have reached the point were we are about to make our first sale, and the second piece of software represents 89% of the sale.
Although I had added substantial value to the company I was happy with the 30% shareholding and had not complain
Hi, Thank you for your question and welcome. My name is ***** ***** I will assist you. Who has control over the code? Have the shares been issued to you? Kind regards AJ
Customer: replied 1 year ago.
Dear Alex,
I have full control of the code, and the only access to the source.
I have never had any documentation regarding shares, I found out by looking the company up at Companies House.
I am so fed up that I am desperate to get out of the company, my only concern is ownership of the second piece of software.
It is branded with the company name, but as with everything else there is no paperwork stating the terms of it's development, whether I was developing it for them or with the intention they could licence/resell it...
Best wishesDes
Hi, Thank you. Could you stop them using the code? Do you want to be paid for the code? If so how much money would you accept instead of taking the shares?
Customer: replied 1 year ago.
I cannot stop them using the first piece of software, but I am prepared to write this off.
The second I could, but as we have a possible large sale that would be self defeating, my intention is that rather than settling for 15% of the benefits of the sale I say, sorry that is my software, not yours, you can buy it from me at five sevenths of the price you have quoted the customer so that you can make a 40% markup.
Hi, Thank you. If you control the software and developed in your time on your servers with no real clear agreement on how you should be compensated, you could argue that it was not a commissioned at all and accordingly you own. Baring this in mind what is the current state of negotiations? Are they refusing to pay you anything?
Customer: replied 1 year ago.
Payment has never been discussed, presumably it will be by dividend based on share ownership. Thank you very much, you have answered my question.
Hi, Thank you. If the company sells the software, then the company will receive the proceeds of sale, these proceeds will need to be distributed by dividend. If you do not legally own shares you wont receive the dividend. The alternative is the company is sold, but in order for this to happen they will have to prove the company owns the shares. Once the buyer starts doing due diligence into the purchase they will see there is an ownership issue, so it is in the interest of the company to appease you. If you do have to accept shares, make sure you are a) made a director or at least have full visual of the company financial info b) make sure your shares are protected from dilution - the best way to do this is with a shareholders agreement (which you can get the company to draw up). Kind regards AJ
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