Partnership disput.

[DLester01]

Hi

Me and my friend decided to go into business together working on a website which shall remain nameless. Prior to the partnership he bought the website from a company and his name is on the contract not mine.

We then set up a limited company which has both me and my friend as directors. I paid for the company myself with my partner agreeing to pay half which is still outstanding. I did all the development work and the marketing while he sat back.

However, two weeks ago I discovered that he was selling illegal drugs and putting porn on the site and to cut the story short I pulled out of the partnership. He agreed to pay me off for which todate I have not received.

As I have not been paid, I have taken my software off his website for which is copyrighted to myself. Both he and the host are now threatening to sue me for hacking which is not true as both friend gave me an account to access the site.

So basically am I in the wrong, do I have the right to withdraw my software which was copyrighted to me and leased to the website until the partnership disolved.

Thanks.

 

[bwglaw]

Prior to the partnership he bought the website from a company and his name is on the contract not mine.

The website lawfully belongs to him unless there is a written agreement to assign the ownership to the previous Partnership or the current Limited Company or if the Partnership/Limited Company has reimbursed the cost.

We then set up a limited company which has both me and my friend as directors. I paid for the company myself with my partner agreeing to pay half which is still outstanding. I did all the development work and the marketing while he sat back.

Are you both Shareholders too? Who owns what? Is there a Shareholders Agreement in place, as well as Director Service Contracts? Is there any other written evidence that the other Director agreed to "pay half". When you say "partner" I am assuming it is the other Director.

However, two weeks ago I discovered that he was selling illegal drugs and putting porn on the site

If he owns the website/domain name then he can do what he likes with it and if he gets caught by the Police then you should be able to walk away.

to cut the story short I pulled out of the partnership. He agreed to pay me off for which todate I have not received.

What Partnership? Are you still referring to the previous Partnership or loosely the Limited Company where you both are Directors. "He agreed to pay you off" - in the absence of any written agreement this may be difficult to recover. I presume he is a Shareholder and has not paid for any shares issued? Is this correct?

I have taken my software off his website for which is copyrighted to myself. Both he and the host are now threatening to sue me for hacking which is not true as both friend gave me an account to access the site.

Your software is copyrighted to you then you are entitled to withdraw it unless there is a written licence agreement. You may have an implied licence to the company but this does not stop you from withdrawing the licence. However, is the domain name and/or the web hosting account registered to the Limited Company or you as Director because you may have 'unlawfully accessed the server' to remove the software?

If you have passwords and usename to the account then it is not hacking per se but have they given you the access details under any conditions, or to access the server exclusively?. Is this not to access the software that you had on the site?

In any event, I feel that the other Director is not likely to sue just because you have 'unlawfully accessed the server'.

until the partnership disolved.

You need to clarify if there is still a Partnership, or if you are just referring to the Limited Company where you both hold Directorships, and possibly shareholding

I can advise further upon your clarifications. Please do not hesitate to email me below if you wish to discuss in confidence

Jonathan

 

[DLester01]

My friend owned the site and domain prior to verbal agreement of the partnership. No agreement to ownership although he did agree to 50/50 split if that makes sense.

I setup the company and put both Myself and Friend down as Directors 50% of the shares each (no written agreements) and yes he did agree to pay half. Most of the conversations we had been recorded in mail or instant messaging as we live some 50 miles apart.

I agreed to pull out of the partnership both website and company on payment of the money I put in which he also promised to me via electronic communications. To date I have not received this.

The copyright displayed below was only shown on it items I had created and any modifications only. The rest of the website was left untoched and still useable.

Hope all this makes sense.

Regards

This software and all modifications are owned solely by David Lester.
In the event that the partnership between David Lester & ---- --- dissolves this software should be removed from the domain (-----------). ​

(--------) will remain the sole owner of the domain (---------) in the event of a break up of the partnership.​

Copyright © 2006 David Lester. All rights reserved.​

 

[bwglaw]

My friend owned the site and domain prior to verbal agreement of the partnership. No agreement to ownership although he did agree to 50/50 split if that makes sense.

As I have stated earlier, your friend owns the site and domain. The issue of ownership is not so clear because first we need to establish that the site/domain has been assigned to the Partnership, then we have to further establish whether the Partnership agreed to assign all assets to the new Limited Company. I would need to check all documentation.

I setup the company and put both Myself and Friend down as Directors 50% of the shares each (no written agreements) and yes he did agree to pay half. Most of the conversations we had been recorded in mail or instant messaging as we live some 50 miles apart.

So you both are shareholders. The situation may be that the other Director is indeed not a shareholder if the shares have not been paid for but if you have already issued the share certificate this complicates it more because you need to establish that the shares were not a gift but transferred on agreement of £X.

I agreed to pull out of the partnership both website and company on payment of the money I put in which he also promised to me via electronic communications. To date I have not received this.

This is useful evidence. Given the complexity of the issues you may need to have a lawyer on board to assist you to persuade the other Director to sign an agreement to pay you £X as a buy-out (and he keeps the Company). A lawyer will be able to advise/assist if the other Director refuses to sign the agreement.

The copyright displayed below was only shown on it items I had created and any modifications only. The rest of the website was left untoched and still useable.

The copyright of the software is yours. However, there remains an issue as to whether you have 'unlawfully accessed the server', and a lawyer needs to look into this.

If you want to resign as Director and sell your shares to the remaining shareholder then the above issues should be resolved by negotiating a settlement for the other Director to buy your shares. He may ask for the software to be part of the negotiation. By having amicable negotiations you may well avoid the need of going to Court, whoever initiates an action first as this will prove far more costly.

If you would like to instruct me to negotiate on your behalf then I am happy to assist if you email me direct. I do not think there is anything more I can advise without seeing any documentation etc

Hope my advice to date has been helpful

Best wishes


Jonathan