Director resigning, but not until Dec 2025

[tallblonde]

I'm a 50% owner and co-director of a small 2 person Ltd business.

My business partner has been acting strangely, has been very critical of my personal characteristics and said he's feeling followed and monitored by the world.
He's also said he needs to pull away and focus on himself.

My sense is he's experiencing mental health challenges but won't seek support.

Three weeks ago he unexpectedly announced he's resigning and will be leaving.....but not until Dec 2025!

I felt relieved he'll be leaving and given I already run the business mostly , it won't be a problem.

Things are very tense, I'm pulling 90% of the weight and it isn't working.

Can you advise how I suggest that he reconsiders and leaves in perhaps 3 months time which would be appropriate given the business.

There is no shareholders agreement (stupidly).

If he won't voluntarily leave before DEC 2025, what are my options cos this isn't working.

Many thanks

 

[Ozzy]

Did he give a reason why it's deferred until that time?
Perhaps raise the subject and say something along the lines that he doesn't need to worry you, you'll be OK and if he wanted to leave sooner to focus on himself that you'll understand and that 'we can work it out', you just want to make sure he takes care of himself sooner rather than later.

 

[tallblonde]

Did he give a reason why it's deferred until that time?
Perhaps raise the subject and say something along the lines that he doesn't need to worry you, you'll be OK and if he wanted to leave sooner to focus on himself that you'll understand and that 'we can work it out', you just want to make sure he takes care of himself sooner rather than later.

His reasons were that he's unhappy in the business, he feels he's less that 50% partner, he wants to pull back and that he feels I'm constantly watching him.
I wasn't watching him until he made this announcement, but now I've become aware that hes been pulling back from January onwards.
The business was my dream and he asked to partner with me.
Becuase he's been a long term colleague, works hard and was a friend, I said yes
I no longer feels he is a safe pair of hands
He's become totally passive and a back seat passenger.
Hence me needing advice about what my rights are to ask himnto leave sooner and the best way of facilitating it
As you can see from my 5am reply, it's really impacting my!
Many thanks

 

[Mark T Jones]

His reasons were that he's unhappy in the business, he feels he's less that 50% partner, he wants to pull back and that he feels I'm constantly watching him.
I wasn't watching him until he made this announcement, but now I've become aware that hes been pulling back from January onwards.
The business was my dream and he asked to partner with me.
Becuase he's been a long term colleague, works hard and was a friend, I said yes
I no longer feels he is a safe pair of hands
He's become totally passive and a back seat passenger.
Hence me needing advice about what my rights are to ask himnto leave sooner and the best way of facilitating it
As you can see from my 5am reply, it's really impacting my!
Many thanks

I think the question was about the reason for the delay?

It may be that they believe they are doing you a favour, or it may be financial motivated, or something else.

That will be a guide on how to resolve the matter

 

[WaveJumper]

Take Ozzy's advice above you really must sit down and talk and I would say listen. There could be all sorts of reasons why they feel the way they do, perhaps you are pulling in more than them to the business and deep down they feel out of their depth and really questioning their own ability, and as such feel insecure.

There could be many other reasons but you both need to be honest with each other and form a plan which suits you both, they may even snap your hand off and wish to walk away sooner, but best to do it amicably or there are going to be all sorts of walls going up and it will I promise you get messy.

 

[pentel]

Resigning as a director is not the same as giving up his shareholding.

 

[tallblonde]

His reasons were that he's unhappy in the business, he feels he's less that 50% partner, he wants to pull back and that he feels I'm constantly watching him.
I wasn't watching him until he made this announcement, but now I've become aware that hes been pulling back from January onwards.
The business was my dream and he asked to partner with me.
Becuase he's been a long term colleague, works hard and was a friend, I said yes
I no longer feels he is a safe pair of hands
He's become totally passive and a back seat passenger.
Hence me needing advice about what my rights are to ask himnto leave sooner and the best way of facilitating it
As you can see from my 5am reply, it's really impacting my!
Many thanks

I realise I haven't answered your question.
The building lease is due for renewal at the that time but I don't anticipate problems with it being renewed.
I told him I'm happy for him to go sooner and he stayed silent.
He said he wants the profit share until Dec 2025.
I appreciate that desire, but he isn't really working.

 

[tallblonde]

Did he give a reason why it's deferred until that time?
Perhaps raise the subject and say something along the lines that he doesn't need to worry you, you'll be OK and if he wanted to leave sooner to focus on himself that you'll understand and that 'we can work it out', you just want to make sure he takes care of himself sooner rather than later.

The building lease is due for renewal at the that time so I imagine he thinks it makes sense to come off the lease then...but I don't anticipate problems with it being renewed.

I told him I'm happy for him to go sooner and he stayed silent.

He said he wants the profit share until Dec 2025.

I appreciate that desire, but he isn't really working.

 

[tallblonde]

Take Ozzy's advice above you really must sit down and talk and I would say listen. There could be all sorts of reasons why they feel the way they do, perhaps you are pulling in more than them to the business and deep down they feel out of their depth and really questioning their own ability, and as such feel insecure.

There could be many other reasons but you both need to be honest with each other and form a plan which suits you both, they may even snap your hand off and wish to walk away sooner, but best to do it amicably or there are going to be all sorts of walls going up and it will I promise you get messy.

The building lease is due for renewal at the that time but I don't anticipate problems with it being renewed.
I told him I'm happy for him to go sooner and he stayed silent.
He said he wants the profit share until Dec 2025.
I appreciate that desire, but he isn't really working.

I hear your wise words about avoiding things being messy.....thats a huge part of my fear.

 

[Mark T Jones]

I think you might be confusing directors and shareholders.

 

[Mark James]

Sounds like he has Paranoia and will only get worse, you need to get him out fast before he drags you down or accuses you of something. Classic symptoms.. I’ve seen it before. Not nice.

Address it now.

 

[Newchodge]

The building lease is due for renewal at the that time but I don't anticipate problems with it being renewed.
I told him I'm happy for him to go sooner and he stayed silent.
He said he wants the profit share until Dec 2025.
I appreciate that desire, but he isn't really working.

Please bear in mind that, if 3 people ask a similar question you only need to give one answer - the others will also see it.

 

[Ozzy]

He said he wants the profit share until Dec 2025.

I appreciate that desire, but he isn't really working.

As a 50% shareholder, he has every right and is entitled to the profit share (dividends) until you buy his shares from him for a fair value based on the company's value; absolutely nothing at all to do with who does all the work. Who does all the work is irrelevant in this regard, only the profits and the value of the company.

As a Director, if he isn't doing his job then he can resign as a director and he is then not entitled to his salary her earned as a director. The person doing the work can remain as a director and receive their director's salary as fair remuneration for the work they do.

You need to treat these as two completely separate and independent points on their own merits.

 

[Paul Kelly ICHYB]

He said he wants the profit share until Dec 2025.

1 - Get them to resign as a director immediately
2 - Agree the the shares to be held to end 2025

You then control the narrative from a management perspective, however, can they can still challenge as a shareholder!

 

[DoolallyTap]

Agreed.
1 - Get them to resign as a director immediately
2 - Agree the the shares to be held to end 2025

Presumably he has a salary and dividends, did he invest in the business? has he put in directors loans?
Possibly get Shareholders agreements and Directors agreements written, agreed and signed, now for the future.
Get him to resign as a director then prove he is not doing the job, sack him!
What is the business worth, say, assets + 3x net profit, or whatever. Buy his 50%
But most of all, talk to him, or let him talk to you, discover what is really going on.

 

[tony84]

Can you try sitting down and just having a conversation with them?
If this is your friend, speak to them as a friend. See what the issue is, not in the sense of trying to get them to work again but just because its your friend.

Then look at the business side, you probably need to be careful so as they do not think you are trying to push them out even if that is what you want and come up with a plan. If that is them holding on to the shares, for 18 months thats fine. But its probably best to get something agreed now otherwise you could find in 18 months time you are making a post about your business partner not giving up their shares despite agreeing to.

Find out what they want, you know what you want, see if you can find somewhere where you are both happy and get what you want.