two men, one website, money owed, can you help?

[okapple]

OK, I have a limited company, and I formed a website with a friend who also has a ltd company. Both of us one man bands.

the agreement for the website is a contract we have both sighed. the site itself isn't a ltd company. just an agreement between our 2 companies.

things were going well for years, until financial issues started to arise. I wasn't being paid my share of the profits for months and months, sometimes years. Right now I am owed about £6k, which is outstanding from the start of the year.

I've had enough, don't want to continue. I've offered to buy his share of the site and run it myself, but he won't have it. So I am sort of stuck, like being stuck in a bad marriage.

What can I do?

If I go to small claims for my money, and he gets a CCJ, will that wind up his company? If his company is wound up, then that makes our signed agreement worthless, and I gain control by default?

I've read other posts on here and there are some clever people giving good advice. Hopefully I'll get some here too!

 

[wood1e2]

Not sure I can help but some general questions may clear up some issues.

Who is the agreement between, you two as individuals or your companies?

Does the agreement include split rights to the website?

How would you get paid when you were paid? Did your company invoice his? Did you invoice him?

How would you know if a sale had been made? And therefore commission/money should be paid to you?

 

[okapple]

My answers below...

Not sure I can help but some general questions may clear up some issues.

Who is the agreement between, you two as individuals or your companies?
>companies

Does the agreement include split rights to the website?
>rights when sold, not exactly 50/50, he is entitled to about 60/40

How would you get paid when you were paid? Did your company invoice his? Did you invoice him?
>My company would invoice his company.

How would you know if a sale had been made? And therefore commission/money should be paid to you?
>an online management system that tracks sales.

thanks!

 

[akirk]

pursue to small claims

that will not wind up his company - you need a winding up demand for that - which usually comes at the end of a long period of non payment etc.

if his company is wound up you will not gain control by default, unless your contract allows for that.

Alasdair

 

[wood1e2]

Persue small claims if your company has invoiced him!!

If there is no invoice then there is no trade to claim against.

But I presume you have invoied his company?

In which a small claims will mean he has to defend what he hasn't paid, and provide paperwork as to his defence.

Obviously that does not help for future sales, but maybe the small claims will help him make his mind up.

The other option while you wait for the small claims to be completed and settled is to set your own website and start again!!

It is an arse but you don't want him to get everything and if he is not going to sell you his part of the deal...then you are stuck!!

Although there may be legal re-course in terms of splitting the agreement and you both moving on...that you would need a solicitor for...and it may cost you more in the long run!!

 

[okapple]

Persue small claims if your company has invoiced him!!

If there is no invoice then there is no trade to claim against.

But I presume you have invoied his company?

In which a small claims will mean he has to defend what he hasn't paid, and provide paperwork as to his defence.

Obviously that does not help for future sales, but maybe the small claims will help him make his mind up.

The other option while you wait for the small claims to be completed and settled is to set your own website and start again!!

It is an arse but you don't want him to get everything and if he is not going to sell you his part of the deal...then you are stuck!!

Although there may be legal re-course in terms of splitting the agreement and you both moving on...that you would need a solicitor for...and it may cost you more in the long run!!

yes, I have invoiced. Seems like there is no easy way to gain control. SMC might force his hand, as the stress of it all may be too much.

thanks everyone for your advice. I've read it all carefully.

 

[Rydalcommunications]

small claims court, and then do it yourself!

 

[okapple]

the site has very high traffic and many members. not easy to replicate over night!!

 

[Frankus]

If he owes you money and it's properly invoiced, confront him with it. Threaten court if he doesn't pay up. If he does pay up, get him to sign agreeing to pay any monies due by end of month after sale is made. If he doesn't - then take him to court - show him you're serious.

You HAVE to get your money and stop him keeping it in future.

If the website is working well and you are earning (as long as you get your money!) then you should try to keep it going and keep the wrangling between the two of you.

Best of luck

 

[okapple]

Thanks everyone

I might persue small claims court.

But what if I do that, and he still can't pay? If he hasn't got the money, he hasn't got the money?

 

[akirk]

Thanks everyone

I might persue small claims court.

But what if I do that, and he still can't pay? If he hasn't got the money, he hasn't got the money?

mmm

but he does have assets, e.g. the other shares in the website...

Alasdair

 

[wood1e2]

If he has no money or assets, then he can pay you over a period of time.

As for the website that is an asset and if you have everything written down properly then I am sure you will be more than happy to take his share of the shares as payment towards what he owes!!

Unless you confront him, or do a small claims you will never know if he has the money or not.

The other thing I have just thought off. Do you not have access to the hosting account of the website?

If you do you can get a copy of the database.

So if you have to go on your own eventually you can install that and start again, and not just starting from stratch

 

[stevesolo]

Hi OKapple

Maybe I've come into this a bit late. You could get really heavy-handed if you want. Issue the company with a Statutory Demand. That is normally enough to scare the sh1t out of most debtors, does not cost a lot and does not require a solicitor, and you don't need to have taken the other party to court to start the ball rolling. I'm sure there has been some mention of this somewhere else on one of the forums here - you could try doing a search. MAKE SURE THERE CAN BE NO DISPUTE ABOUT THE MONEY BEING DUE.

Good luck
Steve

 

[akirk]

Hi OKapple

Maybe I've come into this a bit late. You could get really heavy-handed if you want. Issue the company with a Statutory Demand. That is normally enough to scare the sh1t out of most debtors, does not cost a lot and does not require a solicitor, and you don't need to have taken the other party to court to start the ball rolling. I'm sure there has been some mention of this somewhere else on one of the forums here - you could try doing a search. MAKE SURE THERE CAN BE NO DISPUTE ABOUT THE MONEY BEING DUE.

Good luck
Steve

Small Claims COurt is the first step, not a statutory demand

For a SD you need to show that you have tried everything else - it is also much more expensive to follow through completely...

SCC is much simpler and a good starting point - it can be run through the online process...

SD is a final approach...

Alasdair

 

[stevesolo]

Small Claims COurt is the first step, not a statutory demand

For a SD you need to show that you have tried everything else - it is also much more expensive to follow through completely...

SCC is much simpler and a good starting point - it can be run through the online process...

SD is a final approach...

Alasdair

I take your point, but the best starting point of all is to sit down with the other party, work the issues out, and come to an agreement. If necessary, use an independent arbitrator. The problem you then face is if the agreement is not adhered to by either party. If Okapple then goes to the SCC, there are numerous tactics that can be used to stall the claim if the defendant knows his way around the law. The SD is really a frightener - to force a conclusion without actually ever going to court which in turn saves the courts time. And you're right about the cost of pursuing a SD which is why less than 95% are pursued.

I don't know if issuing a SD has an effect on subsequently pursuing a claim through the SCC as I'm not a lawyer. I am speaking from personal experience in business trying to get people to pay up money that is owed to me.

Kind regards,
Steve

 

[akirk]

I see no point in making threats unless you a) can, and b) will carry through on the threat...

An SD needs to then be followed up with a winding up order...

I don't see why you would do this before you have pursued other avenues - I am not a supporter of hammers for nuts... and I have experience of both...

I would say SCC, then SD then WU

Alasdair

 

[stevesolo]

Each to his own, Alasdair. I fully respect your opinion. All I was trying to do was give the benefit of my experience. If your livelihood is on the line, it focuses the mind on a quick resolution. Maybe that was not the case here. I am not a "qualified" adviser, simply trying to put forward options based on experience.

Have a good night.

Steve

 

[okapple]

Hi everyone,

There has been some progress. I threatened with Small Claims, and that seems to have had the effect I wanted. He now wants to start afresh with a new agreement that gives me 50% ownership of the site, and 50% of all revenue. The outstanding monies will be written off. So I am basically increasing my stake in the site for a small? sum.

Now, my next question for all you experts is - where can I find a sample agreement that does the above. 2 companies sharing the rights of one website. I don't want to start a new ltd company for the site. We'll just invoice other at the end of each month to settle balances.

So a legal agreement that outlines the site, the boundaries, what happens in the event of a sale, the revenue splitting etc. Must have been done before, so something for me to look at?

Thanks!

 

[ADW]

If you want to avoid further problems you need to make sure it is done correctly. Extra cost I am afraid......see a Solicitor.

 

[wood1e2]

there are online template providers.

I would go to a solicitors though, it will cost you more, but in the long run it will save you more!!

As I think you have already found out.

It still doesn't get to the bottom of why he has swindled you out of your money. He is probably sitting at home rubbing his hands at the thought of how much he has made out of you...and you are meant to be partners!!

Even more reason to go completely legal and not spare any money!!!

I am willing to bet you £5 that he will be conning you again within 12 months. Who to say all the income goes through the accounts as it is..willing to steal from a partner!! He is not going to think twice about stealing from the company!!

Obviously I have only heard one side of the storey!!

 

[stevesolo]

If you want to avoid further problems you need to make sure it is done correctly. Extra cost I am afraid......see a Solicitor.

Givven the history, there is absolutely no doubt that you need to do it through a qualified solicitor. Yes, it will cost, but maybe you can share the costs with the other party as it will protect his interests as well.

Good luck.
Steve