Business Partnership Advice

[K B]

As the title suggests I am currently in a 'HMRC' partnership and have been for at least the last 4 years. My business partner has decided that they want to move away from the area we cover, and this is leaving me in an awkward position. We both used our money to get the company off the ground (equal shares) 4 years ago, we have no real assets in the business and only pay ourselves a wage based on an hourly rate. They are suggesting that I need to buy them out, but I am not sure this is true. We only make money when people choose to walk in the door, so it would be difficult to put a real value on what the company is worth. We don't pay income tax as we don't earn over the threshold. We don't have anything in writing as we were good friends before we were business partners. Advice please....

 

[KacperJed]

I'd recommend seeking a solicitor's advice since if you don't pay out, they could take you to court since a verbal agreement means nearly as much as a signed contract. A legal specialist will be able to thoroughly assess your situation based on what you do, your turnover and any other factors. They might also help you value your business, or at least point you in the right direction.

Since you're under the tax bracket, it's worth considering whether it would be cheaper to simply pay out an agreed amount than paying a few hundred pounds for a solicitor. From the sounds of it, the other guy clearly has financial motive and wants to take advantage of leaving.

Hope it works out!

 

[obscure]

We only make money when people choose to walk in the door, so it would be difficult to put a real value on what the company is worth.

If it is true that the company has no value beyond you actually being there when a customer walks in, then you may just as well not pay them anything, kill off the partnership and just start again under a new/similar/your own name. Just tell any existing customers that your partner wants to do something else so you are dissolving the partnership and will be continuing on your own.

 

[EmmaH1984]

HI All,

I need some advice at the start of last year a friend and i decided to start setting up a business online retail. We have since fallen out (I know never go into business with a friend)

However, we decided i would buy her out and i proposed a letter offering her 50% of all monies spent minus defaults on the website. She has since changed her mind. Now She paided cash or paypal for everything and has no reciepts which i do. I have asked her to put her proposal in writing and if we can come to some agreement then we will have to dissovle, i have done everything on this business, many hours working on it. I dont want to lose it. She doesnt have any of the log in details, passwords etc as she hasnt done anything for it. What do i need to do to get her out? should i seek legal advice? it this something that will cost a lot of money, we only started up with less than £600 each and have not started selling as of yet.

ARGH please help. thanks emma

 

[Scalloway]

If you have not yet started selling I would just start up on your own.