Are they entitled to their money back

Discussion in 'Legal' started by Suzi, Nov 8, 2018.

  1. Suzi

    Suzi UKBF Newcomer Free Member

    24 1
    Hi, advice needed please. So my business partner had a disagreement with me and decided to resign from the business via text. She removed stock from the shop without permission and has been demanding the money back that she put into the business. I have told her that I am unable to give her any money back and that a supplier wasn’t paid whilst she was still a director that I am now having to pay fully myself. She still has the stock in possession and has said she has sought legal advice and is entitled to her money back.....is this true? She chose to resign!?! Grateful for any help
     
    Posted: Nov 8, 2018 By: Suzi Member since: Oct 17, 2018
    #1
  2. KAC

    KAC UKBF Enthusiast Free Member

    980 222
    I assume that this was a partnership and not a limited company.

    Did you have a partnership agreement?

    Have any accounts ever been prepared?
     
    Posted: Nov 8, 2018 By: KAC Member since: May 7, 2017
    #2
  3. Suzi

    Suzi UKBF Newcomer Free Member

    24 1
    No it was a limited company, no agreements were in place, no accounts prepared. We had only just started setting up really and being family stupidly overlooked the need for paperwork.
     
    Posted: Nov 8, 2018 By: Suzi Member since: Oct 17, 2018
    #3
  4. Mr D

    Mr D UKBF Legend Free Member

    15,593 1,718
    Unless there is an agreement somewhere that says she will get her money back then like you she is risking her money.
    Normal in business.

    Presumably you weren't daft enough to sign any agreement guaranteeing her the money back if she ever left?
     
    Posted: Nov 8, 2018 By: Mr D Member since: Feb 12, 2017
    #4
  5. Mr D

    Mr D UKBF Legend Free Member

    15,593 1,718

    Unfortunately as way too many people have found, family needs paperwork to protect themselves.
     
    Posted: Nov 8, 2018 By: Mr D Member since: Feb 12, 2017
    #5
  6. Suzi

    Suzi UKBF Newcomer Free Member

    24 1
    So legally is she not entitled to the money back, as she is threatening legal action.
     
    Posted: Nov 8, 2018 By: Suzi Member since: Oct 17, 2018
    #6
  7. Suzi

    Suzi UKBF Newcomer Free Member

    24 1
    She has threatened legal action to pursue getting her money if I’m not willing to pay, has she got a leg to stand on?
     
    Posted: Nov 8, 2018 By: Suzi Member since: Oct 17, 2018
    #7
  8. kulture

    kulture UKBF Legend Staff Member

    7,913 2,154
    Legally she has stolen property that belongs to the company. Legally she is not entitled to any money back UNLESS you decide to buy her share of the company from her.
     
    Posted: Nov 8, 2018 By: kulture Member since: Aug 11, 2007
    #8
  9. Suzi

    Suzi UKBF Newcomer Free Member

    24 1
    What if she has no shares? She didn’t have the money when the business was intially set up, so I added her to companies house as director later on. I only realised recently that I didn’t give her any shares, am I liable for this?
     
    Posted: Nov 8, 2018 By: Suzi Member since: Oct 17, 2018
    #9
  10. KAC

    KAC UKBF Enthusiast Free Member

    980 222
    Have any additional shares been issued? Currently Companies House only shows 1 issued to Suzi and your previous partner is already shown as no longer being a director.

    Was the money introduced as a loan or as share capital? Do you have any correspondence or emails concerning the amount paid in?

    How much is she asking for as this may influence your options.

    Have you changed the locks?

    Is she a signatory on the bank account?
     
    Posted: Nov 8, 2018 By: KAC Member since: May 7, 2017
    #10
  11. Suzi

    Suzi UKBF Newcomer Free Member

    24 1
    She is asking for £3600, she has taken stock with a wholesale value of £2800 so alone at retail value it’s worth more than what she put in. She is asking for £800 to be paid cash. No she isn’t a signatory on the bank account. The locks haven’t been changed yet as I was giving the lease up on the shop and going to run it from home.
     
    Posted: Nov 8, 2018 By: Suzi Member since: Oct 17, 2018
    #11
  12. pentel

    pentel UKBF Regular Free Member

    414 66
    It seems on the face of it that she has stolen stock from the company and that the first thing she should be doing is returning that stock.
     
    Posted: Nov 8, 2018 By: pentel Member since: Mar 12, 2011
    #12
  13. Suzi

    Suzi UKBF Newcomer Free Member

    24 1
    Yes she has, but she doesn’t see it like that, she thinks she owns that stock.
     
    Posted: Nov 8, 2018 By: Suzi Member since: Oct 17, 2018
    #13
  14. KAC

    KAC UKBF Enthusiast Free Member

    980 222
    Sadly, in the absence of any evidence to the contrary, it does appear that she made a loan to the company. She didn't receive any shares in return for the payment and therefore it would probably be classed as a director's loan.
    She is no longer a director and is therefore asking for the loan to be repaid.
    She clearly should not have helped herself to the stock but neither was she entitled to value it at wholesale. She should at least give credit for the retail value
     
    Posted: Nov 8, 2018 By: KAC Member since: May 7, 2017
    #14
  15. Suzi

    Suzi UKBF Newcomer Free Member

    24 1
    Ok thank you
     
    Posted: Nov 9, 2018 By: Suzi Member since: Oct 17, 2018
    #15
  16. patientlady

    patientlady UKBF Ace Free Member

    1,433 281
    Could you get a third party to talk both of you through this?
    Family feuds affect so many other people not just the two of you!
    Failing this does he/she have a heart? Would some tears soften there heart to get you talking again?
    Just another way maybe!
     
    Posted: Nov 9, 2018 By: patientlady Member since: Aug 25, 2009
    #16
  17. Lisa Thomas

    Lisa Thomas UKBF Enthusiast Free Member

    2,999 357
    I haven't read all the answers but I believe your query has already been answered in your previous posting?
     
    Posted: Nov 9, 2018 By: Lisa Thomas Member since: Apr 20, 2015
    #17
  18. Suzi

    Suzi UKBF Newcomer Free Member

    24 1
    No she doesn’t have a heart at all, she’s a very selfish person. She reacted without thinking and is now trying to make me pay for it.
     
    Posted: Nov 9, 2018 By: Suzi Member since: Oct 17, 2018
    #18
  19. dartmoordiva

    dartmoordiva UKBF Newcomer Free Member

    2 0
    Having gone through something very similar in the past (also with a family member, sadly), what really helped us was meeting with our accountant who explained what was what and then worked with both of us to formulate an agreement that we both signed. This was much cheaper than involving a solicitor and helped us both to understand what we were entitled to and what would need to be sorted through goodwill. We had gone beyond the point of being able to talk to each other sensibly so the 3rd party involvement was necessary.
     
    Posted: Nov 9, 2018 By: dartmoordiva Member since: Jul 21, 2018
    #19
  20. KeithGreen

    KeithGreen UKBF Enthusiast Free Member

    640 201
    Sadly to my mind it seems the least worst option here is to let her keep the stock and give the £800. Any legal action would be a blank cheque, not to mention the sleepless nights and anxiety. Business can sometimes make you do the wrong thing for the right reasons. This might be one of those occasions.

    But obviously make sure that any settlement you come to is full and final.
     
    Posted: Nov 9, 2018 By: KeithGreen Member since: Jun 25, 2008
    #20