Problem within directors in Limited Company..Help!

[rajasiang]

Hi Guys,

This summer, I with another three person setup an takeaway shop and registered it under limited company with each of us having 25% share.

But currently, there is a big conflict between the chef and another two person(which is couple) which I cannot resolve.

I was thinking of take over their (the couple) shares and only work with the chef - which is the very good chef that I cannot afford to lose.

Our initial investment is about 2K each. The business upto now is slightly below breakeven point and we have quite some debt to pay off - about 5K.

What option I have when I would offer to buy the 50% share from the couple?

What is the sensible price base of the business performance?

"only 3 months of business, conflict start! I dont think they are suitable to work together anymore"

 

[cjd]

The business is essentially worthless as it has no trading history, debt and is trading unprofitably. Moreover, with the Directors squabbling it can never come good.

Your first bid to them is to explain that the business can not succeed unless they leave and the terms are that you return their investment or a proportion of it - currently they're looking at losing all their investment.

Whether the business is worth more than that is down to you and what you can negotiate.

 

[rajasiang]

Thanks CJD for the advise.

If I take over the business now, is it mean I need to absorb and responsible for the old debt?

 

[multilingual]

The business owes the debt, so regardless of who owns it the debt will remain tied to the Ltd company itself and not to any individual Director.

JB