Business partner demands to be account signatory

Discussion in 'Ecommerce Forum' started by Chubbybear1, Mar 24, 2019.

  1. Chubbybear1

    Chubbybear1 UKBF Newcomer Free Member

    6 0
    Hello everyone,

    I have a question that relates to a much serious issue, however I wanted to know where I stand?
    I have a business partner 50/50 who has requested to be a signatory on the business bank account.
    He wasn’t a signatory at the time the account was setup and wasn’t a director either at that time.
    Is it illegal to object and refuse him such access?
    Recent actions have left me worrying why he wants access now? He says he can freeze the accounts
    Which would cause bigger issues for the business. I don’t know how true that is either he is at best trying to cause me as much stress as possible. He has a solicitor as a partner and he already threatened me with action/s as his partner is far cleverer than me he says!
    He pushed for a company valuation and wanted me to buy him out and pay him a sum of money that he wants the business to pay which is a private debt he inherited when he was a sole trader at the time.
    This is what has a caused the rifled between us now as I don’t feel he has the right to demand this company pay his debt off. I just would like clarification as to whether or not I have to legally agree to his demand to be a signatory on the company bank account?
    Can anyone help me here with clear and precise knowledge what is legal or illegal as far as his request goes? Can he also freeze the accounts?
     
    Posted: Mar 24, 2019 By: Chubbybear1 Member since: Mar 24, 2019
    #1
  2. Newchodge

    Newchodge UKBF Big Shot Free Member

    12,059 3,121
    I assume this is a Ltd company. I also assume he is a 50:50 shareholder and director?

    If that is the case he has identical rights to you. Why should you be a signatory on the bank account?

    This is very indicative of a much deeper problem. I assume you haven't got a proper shareholder's agreement? I suggest you seek advice urgently, @The Resolver may be able to assist.

    If he is not a director, just say no.
     
    Posted: Mar 24, 2019 By: Newchodge Member since: Nov 8, 2012
    #2
  3. paulears

    paulears UKBF Big Shot Full Member

    3,831 952
    If you are a 50/50 business, then why has he no access to the bank account? Seems a rather unbalanced 50/50. You both seem to share the legal responsibility, tax and other responsibilities equally. If he joined this forum and said he was a 50/50 partner in a business and the other partner would not give him access to the bank account, what do you imagine we would suggest?
     
    Posted: Mar 24, 2019 By: paulears Member since: Jan 7, 2015
    #3
  4. Chris Ashdown

    Chris Ashdown UKBF Legend Free Member

    10,324 2,094
    I would let him have access to the bank accounts to view the accounts as his right as a director to be fully aware of what happens in a company he is jointly responsible for, I don't know if you can still need joint signatures to make a payment you used to on cheques, but with his attitude I would not give him power to use the account unless he got a court order ordering you to

    He requests you refuse its a 50%/50% stalemate

    If he damages the company in any way he is breaking his legal duty to the company as a director and you could take action against him in court

    What is the shareholding of all shareholders
     
    Posted: Mar 24, 2019 By: Chris Ashdown Member since: Dec 7, 2003
    #4
  5. paulears

    paulears UKBF Big Shot Full Member

    3,831 952
    Seriously? This would not be the advice we would have given him if he joined is it? What attitude? If I owned half a business and my business partner could empty the bank account and I couldn't, I'd not be that happy? It's clearly NOT a 50/50 partnership.
     
    Posted: Mar 24, 2019 By: paulears Member since: Jan 7, 2015
    #5
  6. Mr D

    Mr D UKBF Legend Free Member

    14,883 1,624

    Well if he wants you to buy him out then you would be buying his shares off him and what he does with the money is up to him. A sole trader debt belongs to the person, not a limited company.
     
    Posted: Mar 24, 2019 By: Mr D Member since: Feb 12, 2017
    #6
  7. Chubbybear1

    Chubbybear1 UKBF Newcomer Free Member

    6 0
    So there is no legal precinct that allows me to
    Stop him from having signatory rights?
    That was the question I posted basically.

    Thank you for the advice, further to this can one partner make the other buy their share in the business?
    Or can the business buy back the shares without the consent or the other partner?
     
    Posted: Mar 24, 2019 By: Chubbybear1 Member since: Mar 24, 2019
    #7
  8. Chubbybear1

    Chubbybear1 UKBF Newcomer Free Member

    6 0




    Thank you for the advice, further to this can one partner make the other buy their share in the business?
    Or can the business buy back the shares without the consent or the other partner?
     
    Last edited by a moderator: Mar 24, 2019
    Posted: Mar 24, 2019 By: Chubbybear1 Member since: Mar 24, 2019
    #8
  9. Newchodge

    Newchodge UKBF Big Shot Free Member

    12,059 3,121
    Not unless you have a shareholders agreement that covers this
     
    Posted: Mar 24, 2019 By: Newchodge Member since: Nov 8, 2012
    #9
  10. Mr D

    Mr D UKBF Legend Free Member

    14,883 1,624
    Why would someone with exact same powers and responsibilities as you not have signatory rights?
    If you are concerned over abuse of bank account then maybe transactions requiring both signatures would work.
    Though can bite you too - that causes chaos when the pair of you disagree on something or fall out, things do not get paid.

    Making the other shareholder do something? Not normally.

    The business is a seperate legal entity but in itself it does not make decisions. Buying back shares using the company would be a decision made by the humans.

    The same rules protect you as protect him.
     
    Posted: Mar 24, 2019 By: Mr D Member since: Feb 12, 2017
    #10
  11. pentel

    pentel UKBF Regular Free Member

    406 66
    Hi

    You talk about a business partner and then shares.

    Is this a limited company or a partnership?

    This makes a HUGE difference but you have not clarified this despite being asked several times.
     
    Posted: Mar 25, 2019 By: pentel Member since: Mar 12, 2011
    #11
  12. Chubbybear1

    Chubbybear1 UKBF Newcomer Free Member

    6 0
    This is a 50/50 share holding of a private Ltd company
    And both partners are Directors
     
    Posted: Mar 25, 2019 By: Chubbybear1 Member since: Mar 24, 2019
    #12
  13. finleydesign

    finleydesign UKBF Enthusiast Full Member - Verified Business

    601 126
    So he has every right to be a signatory and has exact rights as you do at 50/50 you don't call the shots and actually by doing so you could be raising his suspicions to why he can't have access to whats he entitled to, I know it doesn't help but this tends to be why 50/50 can be a nightmare
     
    Posted: Mar 25, 2019 By: finleydesign Member since: Mar 15, 2012
    #13
  14. Chubbybear1

    Chubbybear1 UKBF Newcomer Free Member

    6 0
    You reply makes me out to be as if I am being awkward or doing him wrong!
    I have posted questions as I wish to receive advice on the questions not to be made to feel
    I am doing or being the issue.
    If you knew the whole history and how this person behaves then you’d have a better understanding of him and how I feel.
    Blimey I don’t think I’ll be using your forum again in a hurry judgemental or what!
     
    Posted: Mar 25, 2019 By: Chubbybear1 Member since: Mar 24, 2019
    #14
  15. finleydesign

    finleydesign UKBF Enthusiast Full Member - Verified Business

    601 126
    Ok but we are trying to point out that the history, and issue that are on-going doesn't give you the right to make the decisions, and you need to understand that maybe seek some legal advise, albeit as many have said 50/50 means you are both identical in access to the account

    You need to understand you have no right to refuse or make the decision, as you are both 50/50 you need identical access, control and powers as each other

    If you question any of this, or choose to refuse, then as I say he could certainly argue it's you that's the problem, you sadly by the sounds of it, don't have the ability to undermine, and I'm not sure you could provide sufficient grounds to dictate to him what he can and can't have.

    If you can't handle the truth then yes maybe leave, and go and ask someone who will fill you with what ever nonsense you would like to believe
     
    Posted: Mar 25, 2019 By: finleydesign Member since: Mar 15, 2012
    #15
  16. Mr D

    Mr D UKBF Legend Free Member

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    We don't need to know your problems with him to know what he is entitled to.

    The company appears to have one director with control and one director with same responsibilities without control.
    The shareholding is 50/50, the directorship isn't.
     
    Posted: Mar 25, 2019 By: Mr D Member since: Feb 12, 2017
    #16
  17. pentel

    pentel UKBF Regular Free Member

    406 66
    It sounds like he wants out, but at a price.

    He is asking for a company valuation and probably expecting you to buy him out at half that figure. There are numerous threads on this forum about company valuations and how in reality the value of a company is what someone is prepared to pay. :Look up "Clinton" on this forum who has lots of sensible things to say about valuations

    It sounds like you want him out also so at least you are both starting from the same point.

    Is there sufficient funds within the company to buy his shares back? Do you think you can agree a valuation?

    Look up "the resolver" on this forum for possible involvement with sorting this.
     
    Posted: Mar 25, 2019 By: pentel Member since: Mar 12, 2011
    #17
  18. Chubbybear1

    Chubbybear1 UKBF Newcomer Free Member

    6 0
    Well those 2 responses surely vaildatited my point!
    Your judging and very judgemental
    I’m more than capable of telling him no, my idea to speak out on the forum was to ensure we both not me are doing things correctly.
    You last 2 responders really need to wind your necks in and be less aggressive in your replies and advice!
    I am sure this site was set up to help and advise
    Not criticise people who are indeed of some reassurance.
    Think about it before your respond again albeit I don’t believe you need to.

    I have requested to be removed from the site and it wasn’t due to your words just now. However after them I am glad I have been asked to be received and the sooner the better.
    Really take a step back and think before engaging your mouth before your brains!
     
    Posted: Mar 25, 2019 By: Chubbybear1 Member since: Mar 24, 2019
    #18
  19. Mr D

    Mr D UKBF Legend Free Member

    14,883 1,624

    If you want to be told just stuff you want to hear I'm sure there are sites to do that.
    People will lie to you and make you feel good.

    Won't solve your problems but you can feel good.
     
    Posted: Mar 25, 2019 By: Mr D Member since: Feb 12, 2017
    #19
  20. finleydesign

    finleydesign UKBF Enthusiast Full Member - Verified Business

    601 126
    You don't have the legal right to do so, but as this isn't what you want to hear, your throwing a hissy fit!, You need to find a forum which will massage your ego and tell you what you want to hear rather then what's correct, what was the point in asking, seriously some people!

    I'm starting to see who's the problem in this partnership!! You have some serious issues you need to address first personally
     
    Posted: Mar 25, 2019 By: finleydesign Member since: Mar 15, 2012
    #20