My business partner stormed off after a money tiff. Help!
Friday, September 7, 2012/
Hi Aunty B,
My business partner and I have got on really well for the first year, but then he wanted to take money out of the business.
He has a really flash lifestyle that he loves and he wants to buy the latest car and shoes, whereas I want to build this business. I told him there was no dividend and we had a huge row about it and he stormed off at the start of May and the next thing I heard he was in Europe.
I just assumed he wasn’t coming back when he walked through the door on Monday morning and asked for his desk to be cleared from the junk we had been stacking on it. I don’t want him back as, after the initial jolt and financial shock of him not being here, we have restructured and been managing OK with him gone, and it made me realise we don’t need him anymore.
I own the majority of the company, so how do I get rid of him?
The morning after,
Dear the Morning after,
Sigh… if only we could go back to that first year and undo some of the decisions we made: like signing up with cheap accountants and lawyers who gave us crap advice; like taking on staff who made our life a misery; and like signing up a business partner who we wish we had never laid eyes on.
But look. You can’t rewind the clock. Nor can you pretend he doesn’t exist.
Your partner presumably has shares which have some value. You could offer to buy him out. If you check your shareholder’s agreement it will have a big section on how you buy each other out.
You could go down the legal path and threaten to sue because he might be in breach of his directors’ duties if he failed to turn up and do any work for almost five months and caused you financial loss. You could agree to drop the action if you and he can negotiate an exit.
You could also remove a director after a resolution from shareholders but, as he is a shareholder, that is tricky. If I was you I would sit down and have a huge talk about the future. Try to avoid litigation but do point out that being absent for four months means the company may have a claim against him and it is not a matter to be taken lightly.
If it can’t be resolved amicably then it is lawyers I am afraid.
Your Aunty B
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