How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Richard Your Own Question
Richard
Richard, Attorney
Category: Business Law
Satisfied Customers: 55136
Experience:  32 years of experience practicing law and a businessman.
17027240
Type Your Business Law Question Here...
Richard is online now
A new question is answered every 9 seconds

I am a director of of Ltd Company. I have a partner and we

Resolved Question:

I am a director of of Ltd Company. I have a partner and we have 50 50 each share of the Company. We were behind with a rates bill so I paid £1500 off of the bill on my own Credit Card. Now I am selling my 50% share to my partner, but I want this credit card paid for, she is saying she only has to pay half of the bill? But isnt it down to the Company to pay the bill, because if I pay half when I have sold my shares to her I am paying out of my own cash whereas she will be paying out of the company?
Submitted: 7 years ago.
Category: Business Law
Expert:  Richard replied 7 years ago.
Hello....I think you both are saying the same thing and how you handle this depends on how you treat the debt to you on the company books at the time you value the 50% interest she is paying you for. For example....

Let's presume the value of 100% of the company without the debt to you is 100,000.   Then, she pays you 50,000 for your 50% interest. Then if she paid you, as she suggests 50% of the 1500, you would receive another 750. Total amount received would be 50,750.

Now, if the 1500 is shown on the books as a company debt to you before she buys your interest...then the value of the company is 98,500.   As a result, you would then be paid 1/2 of that for your 50% interest...which would be 49,250.   Then, the company would owe you 100% of the 1500..which would be another 1500..   total amount received by you would be 50,750.

I hope this has given you the guidance you were seeking. I wish you the best of luck!

If I have adequately answered your question, even though the answer might not have been the one for which you hoped, I would appreciate it if you would please click the GREEN ACCEPT button NOW, so that I receive credit for my work; otherwise, though you have made a deposit, I do not receive credit.

If you need additional clarification on this question after clicking ACCEPT, please do not hesitate to click Reply and I will be happy to do what I can to help you further. Thanks for allowing me to be of service to you.

The information given here is not legal advice. As all states have different intricacies in their laws, the information given is general only. This communication does not establish an attorney-client relationship with you. I hope this answer has been helpful to you.
Customer: replied 7 years ago.
Sorry I think I must be a bit stupid. I have paid a company bill for £1500 ok.She is only going to pay me this amount once she has bought the company off of me. Therefore her half will be coming from company profits and I will have to pay from my own pocket, because she will not add this amount on to the sale amount before the sale.
I cant see how this is right?
Expert:  Richard replied 7 years ago.
<p>Not a problem. All you care about is getting paid your 50% of the company's value today and getting your money back.   After that, the company belongs to your partner and you no longer care. So, the company owes you 1500. Because you own 50% of the company, 1/2 of that debt is really coming from your own pocket.   </p><p> </p><p>You just want to make sure that in valuing the company to determine your 50% share, the value of the company does not reflect the debt to you.   If it doesn't, then the value of the company will be 1500 more than it would be if it did reflect that debt.   As a result you will be getting 750 more for the value of the 50% plus 750 from her after the sale...which totals the 1500 you are owed.</p><p> </p><p> </p><p><em>I hope this has given you the guidance you were seeking. I wish you the best of luck!</em></p><p> </p><p><em> If I have adequately answered your question, even though the answer might not have been the one for which you hoped, I would appreciate it if you would <u>please click the GREEN ACCEPT button </u></em><em><u>NOW</u></em><em>, so that I receive credit for my work; otherwise, though you have made a deposit, I do not receive credit.</em></p><p> </p><p><em> If you need additional clarification on this question after clicking ACCEPT, please do not hesitate to click Reply and I will be happy to do what I can to help you further. Thanks for allowing me to be of service to you. </em></p><p> </p><p><em>The information given here is not legal advice. As all states have different intricacies in their laws, the information given is general only. This communication does not establish an attorney-client relationship with you. I hope this answer has been helpful to you.</em></p>
Richard and 2 other Business Law Specialists are ready to help you