Maternity leave whilst in a business partnership

[collettejoanne]

Hi,

I started a business 6 months ago with a friend as my business partner. I became pregnant, but as I work from home decided that it was feasible to continue my role with help from my husband without the need to take any time off. However I went for my 20 week scan yesterday and discovered I am having twins, which changes things considerably!

I have alot to get my head around, my business partner is pressuring me to make a decision as to what I'm going to do and has suggested I hand my half of the business over to someone else free of charge. We haven't made any profit as yet, however it will in the future and we haven't made a loss which is good.

I suppose I'm asking for advice, I'm feeling that I really don't need the stress at the moment, but I've put alot of work into the business to set it up.

I offered to have 6 months off and get someone else to do my role, however my business partner says it will be difficult to get anyone to do my role when we aren't making profit.

My business is a community magazine and my role is publishing/editor/designer etc whereas hers is sales.

any advice of either a legal or practical nature would be much appreciated.

Many thanks,

Collette

 

[OldWelshGuy]

bring a thrid partnher in is an option, or outsource the design work

 

[Christine Hough]

Firstly congratulations. Your bundles of joy will prove a delight.

I definitely think this is going to be a negotiated solution which both of you agree to. You have not been going long enough to have much in the way of maternity benefit nor redundancy.

Have you put any funds into the business. How solid is the base you have built so far. Is it as I read a partnership and not a ltd company.

Maybe the fairest thing is to incorporate it and give yourself some shares to reward the foundations you have put in, (especially if you have not taken much in the way of salary) and then sell other shares to someone wanting to come and replace your ( for example, partner 50% you 10 % replacement 40%)

It all depends on what ground has been gained. However if I were you I would not commit yourself to what you will want to do after you have your babies. You may find that you really want to have a job as a break, or you may find yourself completely happy being their mum.

 

[collettejoanne]

Hi,

thankyou for your replies so far. It is a partnership rather than a limited company. I quite like the idea of shares, would that mean getting the business valued and then splitting the shares with someone buying in? Or a legal document dividing percentages of the business. Sorry if that doesn't make sense, it's all very new!

Also would you look at shares at the start of maternity leave or after when I decide if I could continue working or not? If it was after, how would I get someone to cover my role?

Thanks

Collette

 

[collettejoanne]

.... forgot to say. I did put some of my own money in initially, but paid back now.

Collette

 

[Christine Hough]

I would do it when you leave.
It gives you a small ownership and does not commit you to working again for them or not.

But others must advise you as to whether it is cost effective to incorporate it. Say it is 50:50 now. You could issue 10 shares at a nominal value of £1.00 each. You and your partner having 5 each. Then you could 'sell' 4 to a new director if you agreed. But of course it does not guarantee that they will ever make you any money. The company can decide whether to pay dividends on the shares, and how much.

It all depends how big you expect things to go. It might be over the top for what you are doing.

 

[Christine Hough]

You could just employ someone without giving them any part of the business.

 

[collettejoanne]

Hi,

thanks for your reply. I had a chat with my partner and suggested I keep 10% of shares and someone else with 40% and herself with 50%. Initially she thought this a good idea, now she is saying that she wants a time limit of 1 year after which she wants me to either return and do 10% of the work, or buy back my shares and return to work full time or receive a one off payment to release my share.

I'm wondering what to do, my partner feels that she is going to be doing more of the work by bringing someone in, but surely that would be up to her and the new person. My understanding is that if we are a current 50:50 partnership and she keeps 50%, me selling 40% of my share doesn't affect her. Or maybe I'm looking at it wrong?

I would love to hear what other people feel about this and if legally I can be made to put a time limit on my share ownership.

Many thanks,

Collette

 

[MyAccountantOnline]

The ideal solution in my opinion would be to employ someone to cover your absence - if that's really not at all possible you need to decide which is more important to you, and to be fair to your business partner to do that asap.

If I was a man I'd be shot down here for being sexist but as a Mum and a business owner my honest advice - put the business on hold and spend some time looking after yourself and your twins. This time is really precious you wont do it again, and your health is so important, you don't need stress now - you can start another business at anytime. That's someone speaking with the benefit of hindsight.

Good luck with whatever direction you take

 

[collettejoanne]

Hi,

thanks for your reply. I think employing someone will be tricky as we are not making any profit yet. I think it's more principle than anything as to hand it over to someone else will really annoy me when the magazine is delivered through my door every month. Ideally I'd like to put it on hold, but we have advertisers booked in for months ahead and we would lose their business.

However I could really do without the stress and you're right in that my familys health is more important.

I'm just wondering if it's usual to have a share in a business with a time limit on it?

Thanks,

Collette

 

[MyAccountantOnline]

Hi,

thanks for your reply. I think employing someone will be tricky as we are not making any profit yet. I think it's more principle than anything as to hand it over to someone else will really annoy me when the magazine is delivered through my door every month. Ideally I'd like to put it on hold, but we have advertisers booked in for months ahead and we would lose their business.

However I could really do without the stress and you're right in that my familys health is more important.

I'm just wondering if it's usual to have a share in a business with a time limit on it?

Thanks,

Collette

You may be able to come to an arrangement between you both but I suspect if you stay in the business your partner is going to feel pretty peeved that you go off on maternity leave and then expect to return as if you've not been away taking a share in a business he/she has put 100% into - a very difficult position and one for which their is no ideal solution.

Unless you've put money in I'd walk away at this point wish your friend well and concentrate on number one for a few months then reassess what you want to do.

 

[Mike W]

I'm wondering what to do, my partner feels that she is going to be doing more of the work by bringing someone in,

And she's completely correct. It's her business and yours. It was your ideas and hers that laid the foundation. And it was you and her who, having chosen to go into something together, have a total grasp of the concept, the aspirations and so on.

Now she'll have to a) find someone she can work with, b) train the person in the workings of the business, and c) hope to God that she gets on with them in the long term.

I shouldn't be too surprised she's a bit miffed.

 

[collettejoanne]

Hi,
so, would you just walk away now with nothing, or give notice? I realise it's a difficult situation, but I really didn't plan on having twins!!

Thanks

 

[Mike W]

Hi,
so, would you just walk away now with nothing, or give notice? I realise it's a difficult situation, but I really didn't plan on having twins!!

Thanks

Nobody's saying you did. But you DID plan on going into business with someone, only to fall pregnant 6 months later. The timing's not great really.

And, if you were honest with yourself, boot on the other foot, I'm sure you'd be pretty peed off if it was happening to you.

Up to you what you do ...but you've got your investment back, so you've not lost anything.

And finally, being frank, it's easy to say that you'll just take 6 months off now. It's certainly not unusual for new mothers to change their mind once baby arrives. So what then?

Should she trust you, that you'll come back in 6 months? After this, I'm not so sure she can risk it.

ps. I'm not saying this to have a go. I'm just giving an honest opinion.

 

[scribe]

I don't know the answer to your problem. I just wanted to say congratulations.

 

[crphillips]

This is the problem with partnerships. You've both gone into this as a joint venture.

I think the fact you've made your money back is a good thing.

If I were your partner I'd be pretty peeved at the situation and the fact I've got to mess around finding someone else and teaching them about the business.

Unfortunately you cant have your cake and eat it. Just hand in your notice and give it to someone else and be grateful you haven't lost any money.....we can't be talking about huge amounts of money you've put in anyway can we?

Get it sorted and enjoy looking forward to the birth of your twins and the time you'll have with them. You got bigger fish to fry now.

 

[deniser]

Congratulations first of all.

You need to approach this from a slightly different standpoint.

Unless you have agreed the position regarding maternity leave at the outset, you have no legal right to any maternity leave at all nor to any laws which protect an employee. You are not an employee, you are a partner and the whole ethos behind a partnership (unless agreed otherwise at the outset) is that the partners work equally in the business.

If you take maternity leave then you are not working equally in the business and for that reason it is unfair on the other partner.

If you are an employee then things are completely different of course.

As others have said, I would probably bow out at this stage and dissolve the partnership.

 

[collettejoanne]

Hi,

an update really. It's been such a tricky situation! My partner is peeved (understandably) but has a few people to approach to see if they want to take over. I told her that I'll leave the partnership after I've put the next magazine together and handed over to a new person, but she's not happy with that. She says if she can't find anyone the business will finish, if we can she would like me to remain in the business (10%) for a year and reassess after that, which sounds ok to me as who knows what will happen in a year.

I think an earlier post I put may have been a bit confusing as I would never have expected to take maternity leave on 50% of profit and return as if I hadn't been away - that would be too much to expect to say the least!

Thanks for everyones replies, they really have been helpful.

Now, does anyone know where I can get a bigger house, new car, baby stuff etc on the cheap to accommodate 4 children! (not having quads - already got 2 boys)

Thanks again,

Collette

 

[deniser]

Now, does anyone know where I can get a bigger house, new car, baby stuff etc on the cheap to accommodate 4 children! (not having quads - already got 2 boys)

Gosh, I guess there is a huge difference between 3 and 4. You will need a people carrier at least.

Wishing you all the best.