Seperating from a business partner

[Arandombusiness]

Hi thanks for checking my post out firstly.

About a year ago a friend and i started a company together. The company works well altough it has slight issues He started lieing to customers about delivery times the stuff he would send to customers would be terrible work, i was constantly rectifying problems he was creating. i am now working 18hr shifts in order to keep money flowing for my self as he now sits around doing nothing, he even had the cheek the otherday to say i should start working harder! I asked for a person to train to help me he said this would be fine if i paid the worker from my own pocket. I have been thinking about calling it a day as i am working too hard to earn a reasonable living as most money i earn goes to him as he was the inital investor.

It is a complicated situation and as it was just an idea to begin with nothing has officaly been registered in either name. Iam thinking of no longer working with him and doing the same thing by my self. If i was to do this would he legally be able to stop me? If i was to succeed the chances are he will sabotage me and leave negative reviews all over the internet as ive seen him do this to others before, if he is to do this what could i do to stop him?

Thanks for taking your time to read this i hope i have cleared everything up altough some things may seem vague.

 

[soundengineeruk]

Well if there is no paperwork about the setup, shares, contracts etc.. Then nothing stopping you walking, but seek professional advice before hand.

If you left today could he survive on his own?

Not much you can bad reviews as we live in this digital age.

 

[Annoying Donkey]

If he invested money, then you're on shaky ground.
I doubt a court would believe he invested without expectation of return.
The court might well believe he invested in the expectation that you'd do all the work and he'd get some of the proceeds...
You need to collect any written evidence you have that supports your story, then put it in writing that you wish to split because he's a lazy bugger or whatever reasons you have.

I'd also tend to suggest taking legal advice after you collected any evidence and before you try to split... There is a legal forum on here, however if you want reliable legal advice, you're going to have to pay for it...

As for negative reviews, anywhere he can post, you can. Just respond in a polite non emotional manner. State the facts. Negative reviews that have a polite response, especially that indicate the negative review is malicious, can help you.

 

[Mark T Jones]

As ever in these cases, the sensible way is to sit down and discuss it. Far easier said than done, but the outcome is nearly always better (and cheaper) than diving in with legal teams

Before doing that, thank what resources a new business would have/need both tangible and ip and how you might realistically split existing resource to go separate ways

With absolute respect, there are always 2 sides to a story - you need to consider (ask) what his real thoughts are on the current situation

 

[Clinton]

With absolute respect, there are always 2 sides to a story - you need to consider (ask) what his real thoughts are on the current situation

Indeed. We've seen in other threads this same resentment that one person's doing all the work while the other is making money for "doing nothing at all".

However, if someone invested money in a startup and took a 1000-1 bet ....he's entitled to sit back, do no work and make whacking great chunks of the profit (even if that profit is 1000x his original investment). That's how 1000-1 bets work.

The funny thing is that in most of these cases the one making the complaint didn't have a problem with the deal at the start. At that time they were perfectly happy to take the money and agree the terms. But when the profits start coming in they begin questioning whether it's a fair arrangement. Funny how that works.

The above may not be the circumstances in this case, of course, but as Mark says, I'll wager there's another side to the story.

 

[cjd]

As a first step I think you need to put down on a piece of paper what you would like to happen. Be reasonable and fair. Then say that as the business is now at this position and to safeguard its future, it's time the situation between you two is formalised, either as a partnership or shareholder's and and proper employment contracts.

He'll either negotiate or not. At that point you need advice on how to proceed whichever way it goes.

 

[tombuckland]

You have to explain the situation in terms of only business. Suggest to either a.) Buy him out. b.) Get brought out yourself or c.) Sell the business.

Business partners is such a strange one. I have 2 different ones on 2 separate businesses. One is great, amazing and I'm probably the one that doesn't do enough. The other is terrible and as a result I've personally lost interest in the business and it doesn't make that much as a result. So If I were you I would explain the situation as you've explained it here, and just say you cannot work together anymore. Arrange buy-outs if needed or say he has to take on XYZ tasks. Basically jump ship or fix ship!

 

[obscure]

It is a complicated situation and as it was just an idea to begin with nothing has officaly been registered in either name.

When you say nothing was registered do you mean NOTHING? Are you both working as freelance individuals or did you in fact register a Ltd company?

 

[Gecko001]

Even though there is no written agreement that does not mean that there is no business. I assume that there is a name under which the two of you trade. Who would be sued if something went wrong in the business, such as a customer was claiming damages for work done or items sold? Even if the two of you do not decide to go your separate ways, maybe it is time to get this business formalised with a partnership agreement or even set up a Ltd Company. Even if you were both working in total harmony, you need to know what will happen when problems come along in the future, whether it is due to tax, claims for damages from customers, and of course dissolution of the partnership/company.