Hello Debra, I am in a postion with my common law ex over a business that was purchased while together. The money that is involved is $50,000 (his contribution) for all start up and merchandise. I moved from a different city and career in order to be in British Columbia closer to him as he owns three rental properties and has a full time job here. We are disputing the amount that I am to pay back. I am asking that we split the 50 into 25. The value of the business for resale has dropped considerably as the market has softened and I was hoping that meeting half way would help offset the fact that the money I now earn is 30,000 less than what I made before, a sacrifice made to ensure his businesses were not interrupted. The business accounts are in both our names and he has very little time contributed aside from 3 days of tax time this year as he is listed as sole proprietor. I have completely worked and run this business now for 2 years without any additional financial contributions from him. During the time that we liver together 2.5 years I paid $600 towards the mortgage on his home and bought %80 of the groceries. I kept the home while he continued to develop one of his properties. Adding 2 additional forms of rental income. I've made it clear that in no way am I trying to "take" him but feel that the business could certainly be something we meet in the middle over. We have yet to agree to an amount and no paper work has been signed or drawn up. I am at a loose of how to legally approach this.What are your thoughts Please? Thank you for your time.
Let me make sure I have the facts right.
He paid the $50,000.
You contributed your effort.
And you gave up your job to work there.
So are you saying you are buying him out and the business will be yours and he wants the full $50,000 back?
But the business is not worth that much.
This was not a loan to the business was it?
He paid the 50,000 and I solely run the business. I gave up my career to be in his town and this was what we came up with for my employment. I want to buy him out but not at the 50 he's asking. We bought the business at 30 and put money into new computer systems training etc. The loan was a personal loan to me for the business, nothing was signed off on. I never expected that we would end up anything other than married at which point it would be ours profit included.
Well he is not entitled to the $50,000 back as it was a loan.
If you were each equal partners in the end then he is entitled to half the appraised value and not more.
So the fact he leant me the money means he's not entitled? Just to the half that it would be appraised at.
Did he lend you the money or was this an investment in a joint business venture that so far has not done as well as you had hoped?
The money was never in my bank or hands. He claims he never wanted anything to do with it and wanted to be paid back as soon as we could. The business has not been doing well as the market has softened so there has been no chance to get the money back to him. Now that we are splitting I am struggling to feel that it's fair I pay the full amount back when there are sacrifices that were made on my behalf financially for this to work. Something he fails to see the value in
But I just don't believe he meant it to be a loan. Was this not a joint business venture that you both contributed to in different ways?
I suppose it was a joint venture. I mean on the books it's certainly that way. He has the business number gave up the cash and I've run it for the last 2 years.
If it was a loan then he would be entitled to get it back but if it's an investment just as you invested your time and career then he's lost that money to the company and he is entitled to only half of what the company is worth.
It doesn't seem fair to me that he would get all the money back unless there was a clear agreement.
People hope to get investments back but that's the risk they take.
There is nothing agreed between us on paper that this was a loan. Although he has made every effort to make clear he wants every cent including interest back.
The whole time or just when he saw the relationship was ending?
He always spoke about getting his money out
But as pay back or as in investment by getting the profit from a flourishing company?
if we remained together and the company flourished he would have benefited from the profit as my money would be our money
I see.It's very hard to know what a Court would order.The company may owe him money then but if it's worth less than the $50,000 and it's his company too then you could walk away and start over couldn't you?Do you have to have this company exactly?
it's true I could just walk, that would negatively affect the potential value in the company for him as there would be no one to train and outline the way we run the business. He does not know how to do it. I don't want to leave him with this kind of financial burden so was trying to come to a fair agreement between us. He is really struggling with the idea that he would be walking away from 25 I guess if I wanted to I could just walk and it would be 50. That just seems wrong to me though
But he has to be realistic.You are not getting your contribution back and the company is worth less that his loan.So why would you take a company that has a negative value and pay him back etc.So he should know that he is not able to get the money back or at least not all of it as it's not there.
And it's not fair.
Ok great thanks for your time
You are very welcome.
I sure hope you can work this out soon.
Keep me posted too!
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