Can a 50% partner force insolvancy


M

Mick Miller

I have a partner who wants out of the business.

the buisness is making money and can cover its debts in the long
term........3 months

but she wants out and for me to buy her out plus give her a share in
the future of the business

the business is a startup and just completed its first year.

my offer to her was to wait the next 3 months and bring in the money
owed to us and she can leave with 50% of this less costs.

but no future holding or returns on future business

her solisitor is advising her to force insolvancy to try and force a
better deal

i intend to carry on.........but was told that she could not do this
while the company has debts

any advice?
 
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M

Mike Lewis

Mick Miller said:
I have a partner who wants out of the business.
Is it a partnership or a ltd company.
the buisness is making money and can cover its debts in the long
term........3 months

but she wants out and for me to buy her out plus give her a share in
the future of the business

the business is a startup and just completed its first year.

my offer to her was to wait the next 3 months and bring in the money
owed to us and she can leave with 50% of this less costs.

but no future holding or returns on future business

her solisitor is advising her to force insolvancy to try and force a
better deal
If it's a partnership then a partner can force an "accounting" to take
place. Basically this forces you to divide everything up and it gets
expensive.

If it's a ltd company then she can't force an insolvency on the company
unless it owes her money which is overdue for payment. Also if she wants to
force an insolvency on a ltd co then an insolvency practitioner is going to
ask where is the money to pay his fee and expect the person appointing them
to guarantee it if there is none.
 
M

Mick Miller

Is it a partnership or a ltd company.


If it's a partnership then a partner can force an "accounting" to take
place. Basically this forces you to divide everything up and it gets
expensive.

If it's a ltd company then she can't force an insolvency on the company
unless it owes her money which is overdue for payment. Also if she wants to
force an insolvency on a ltd co then an insolvency practitioner is going to
ask where is the money to pay his fee and expect the person appointing them
to guarantee it if there is none.
yes it is a ltd .....and both partners own 50%

i prefer to at the work at the company........

but she want s out ..........can she force these fees on the company?
 
M

Mike Lewis

the joke is no director has ever taken salary or are due expences.

It's difficult to see on what grounds she can start any insolvency
proceedings, unless she can come up with some expenses.
 
J

John Smith

Mike Lewis said:
She can't force it into liquidation unless she is owed money such as unpaid
salary or expenses. She could take out a petition but she still has to show
she is owed money. To show she is owed salary then I think she would at
least have to come up with a contract of employment in order to demonstrate
what she is owed.
What about S459?

This enables a minority shareholder to treat a ltd co as a partnership
and have it dissolved. A great weapon for a "partner" who has been
booted out by the others, and who wants to be bought out at a
reasonable rate.
 
M

Mike Lewis

John Smith said:
What about S459?

This enables a minority shareholder to treat a ltd co as a partnership
and have it dissolved. A great weapon for a "partner" who has been
booted out by the others, and who wants to be bought out at a
reasonable rate.
Ever seen it done? What about the cost.
 
J

John Smith

Mike Lewis said:
Ever seen it done? What about the cost.
Yes, it depends on whether the company has enough inherent value for
the remaining shareholders to want to hold onto it.

With many companies, it is cheaper for everyone to just walk away from
it.
 
M

Mike Lewis

I looked at this section. It is for shareholders who are being unfairly
prejudiced. In this instance one of the shareholders is choosing to leave.
There is no suggestion that she is being forced to leave or bering excluded
from managemenet. She chooses to do so herself and I doubt she would be able
to use this piece of law.
 
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J

John Smith

Mike Lewis said:
I looked at this section. It is for shareholders who are being unfairly
prejudiced. In this instance one of the shareholders is choosing to leave.
There is no suggestion that she is being forced to leave or bering excluded
from managemenet. She chooses to do so herself and I doubt she would be able
to use this piece of law.
It comes down to being able to claim that one is being forced out as a
result of a breakdown of trust between the parties. I've used it.
 

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