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 Irwin Law Your Own Question
Irwin Law
Irwin Law, Attorney
Category: Business Law
Satisfied Customers: 6845
Experience:  30+ yrs. representing small business, real estate, probate
18215332
Type Your Business Law Question Here...
Irwin Law is online now
A new question is answered every 9 seconds

I have a test drilling business in N Y state ! My partner (a

This answer was rated:

I have a test drilling business in N Y state ! My partner (a woman) broke away from another co to start our own ! I had 10 % and she handled the office there where she went after collecting the money as well as the office clerical ! Towards the last months there she collected enough money to feed the pres and secretary there their salary and owners draws of 6000 dollars a week at their pushing ! not knowing this I was sparsely paid ,often going on unemployment while working to survive with the understanding that no money was coming in !! I offer this by way of background -there is much more !
She was always pushing for us to go into business eventhough I knew that was the case and did so when I could get a machine as a buy out -at the right moment ! I did so ! She got the corp papers and set it up ! We put equal money in and I - keeping our initial rig in my name provided the machine to do the work !! Her claim was that she could collect the money .get the clients . do the pricing and the office ! I would perform the field work ! She was also to set it up as a W O B and was allowed to have 51% ! 3 years into the business - No W O B , I have to set the pricing - she inputs , The clients came over and were secured by my reputation , engineers who knew me , engineers who used us and were won over by me etc. I have to put in many more hours and weekends to keep machinery running and to perform extra work and job completion !! She has total freedom -being in the office and has long lunches - goes visiting for personal reasons and needs and in the office when I am there does not focus on work but rather directs her attention upon idle chatter !!
Question : The W O B seems Unnecessary since we are growing without ! She starts but cannot complete the application anyway ! I want to change the structure to where I have -what I think is the legitimate % due me ! The draws are distributed 50/50 at this point and I believe that is not equitable ! I also want legitimate control and legal decision making !! When I push for more aggressive collection of funds I am not taken seriously !!2/3 of receivables are over 90 days old going back to almost a year !
Another question is what would be a fair distribution of percentage of partnership in this case ! I hope adequate info is given to provide some answer to my problem ! Thank you !
I am not sure what you mean by W.O.B.. You say she got the corp papers and "set it up". How is the stock in the corp held by percentage?
Customer: replied 3 years ago.
Hi ! W o b = woman owned co t that is to acquire minority work ! That is no longer of interest ! For that original purpose she was given 51 % and I 49 % ! we share all on a 50/50 basis though ! By setting up the co , I mean that she did the legwork of getting a lawyer online to set it up - we paid equal amounts for initial setup and expenses ! I provided the equipment and tools in the value ofabout 150000 $ ! We both had to do without salary for awhile as expected ! The w o b appears unnecessary since we are growing well without it ! Another point I wanted to makewas that have to put up with the lion shareof work , hours put in and generally generating the money ! Another point is that the machine is still in my name and receive no remuneration for it's use forthe 3 years in operation !
With all this I see myself slave to giving her 50% when it doesnt warrant that much ! I feel 30% perhaps ! I would like some insight if possible as to how the co should have been setup ! I am asking a lot of you in info so if a higher rate is desired on asking this advice let me howto add it on to just answers etc ! Thanks !

Hello again. I think you've outlined the problem nicely and you understand that your original set up was designed for a purpose that didn't occur. You had to give her 51% to be a WOB, but It sounds like equity stock split should be closer to 90-10 or perhaps 80-20 based on the contributions of each of you. With the current set up she controls the corporation, but the business won't operate without you and this is your lever to require that the corporation stock be re-distributed between the two of you, with you having majority control. The salaries and bonuses can be determined separately from the stock ownership, so it won't make much difference whether she owns 49% or 9% until the business is either sold or liquidated. Her compensation should be based on her production and value to the business. This is not a do-it-yourself or on-line legal project. You need a local attorney who represents you personally and not her or the corporation. She could nix a stock re-distribution plan or deny you more salary than to herself. In that case you have the ability to start another company on your own, whereas she doesn't. That is the high card that you hold in any negotiation with her or her lawyer. These situations are never easy, and you should definitely use professional assistance.

 

I hope that this information is helpful. If not, and you need further information, please do not rate this Answer and just send me a Reply asking for clarification. After that, I hope you will enter a positive rating so that I will be compensated for assisting you. Bonuses are also appreciated. You will be given that opportunity after entering a positive rating for this Answer. Also, be sure to verify this information with a local attorney who is familiar with your local laws and procedures. Thanks again for using Pearl.Com- Just Answer. Your business is appreciated.

Irwin Law and 4 other Business Law Specialists are ready to help you

Related Business Law Questions