Business Breakdown

[Boopbleep1]

Hi,

I am hoping for some advice as I am feeling lost and unsure what to do.

A (once) friend and I own a Ltd company with 50/50 shares. Initially, we both invested a small amount of money but it was at a 35 / 65 split as I was saving for a house and he had spare cash.

We have been working together for around three years now and the company is not making profit but is about breaking even.

Initially, I built the majority of the website, designed the logo and had an initial client base which we have slightly expanded upon.
We both taught the class together, he does the finances and I do the majority of the admin. I expanded and added an additional class which I taught solely.

A while back I had an injury and major reconstructive surgery which meant I was unable to teach. He was very frustrated about my lack of participation but I was bed bound.

I am now well on the path to recovery and have started to teach again but I am having to gradually up my participation. They have suddenly asked to buy me out the business and has been very uncommunitive and evasive.

I understand the frustrations of my injury, but it was neither purposeful or expected and I am working hard to be back to where I was.
They have listed many reasons why I should be bought out. I don’t want to but don’t feel I have a choice if this negativity continues.

I am looking for advice on where I stand as someone who had put a lot of time and effort into the business and is reluctant to part ways and to explore my options in terms of a buy out if it comes to that as we both put in different amounts, are not profitable and are 50/50 shareholders.

 

[Lisa Thomas]

Is the company solvent?

Why are you keen to stay a shareholder of a company that isn't generating a profit/creating dividends for you? This could be the perfect time to exit.

Of course, if you don't want to sell your shares you don't have to. You could always consider resigning as a director but retaining your shares if the price is not right.

 

[Boopbleep1]

Is the company solvent?

Why are you keen to stay a shareholder of a company that isn't generating a profit/creating dividends for you? This could be the perfect time to exit.

Of course, if you don't want to sell your shares you don't have to. You could always consider resigning as a director but retaining your shares if the price is not right.

Because it is something I very much enjoy doing and have done for many years. I can’t afford to start up due to equipment and venue. Although it is not pulling profit, the equipment meant a large start up cost and it is still a relatively new business with room to grow.

 

[Lisa Thomas]

Have you tried offering to buy them out, instead?

One of you needs to give, if you cannot come to an amicable conclusion.

I recommend you speak to @The Resolver for advice on the way forward.

 

[Paul Kelly ICHYB]

That question we see a lot of here - what does your shareholder agreement say about this type of issue?