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WCLawyer, Attorney
Category: South Africa Law
Satisfied Customers: 15597
Experience:  L.LB (UOVS)
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I have signed a associate agreement with a partner. He is now

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I have signed a associate agreement with a partner. He is now taking so much control over my business and i am becoming a victim and forced to sell shares. How can i get out of this, or what can make the agreement null and void? Please help.
Good day.

This is an info request to assist you better. Please continue on this thread.

How are you forced to sell shares?
Customer: replied 3 years ago.

I dont want to sell me share. but he is implementing policies and procedures in the company without my consent, making decision making contributions impossible. the working conditions is also unbearable.

Customer: replied 3 years ago.

we are suppose to have a 50% partnership, but he is taking 100% control, doing just what he wants. surely the agreement becomes null and void if the partner is not favouring the other partners. how can i solved or get him out of this?

Let's begin from the start:

Do you have your own company and he has his own company and you entered into a kind of a joint venture company?
Customer: replied 3 years ago.

no it is my company. i had a problem with some funds and was looking for a partner to get more funds. he invested R150K for 50% shares in my company.

And is this a CC or a Pty Ltd or was it a Sole Proprietor when he bought?

Customer: replied 3 years ago.


Did you and the other person draw up an association agreement when he came into the CC?
Customer: replied 3 years ago.

yes, we did, that is my question.

And, with how he conducts himself now, is he in contravention of that agreement? Is he doing things that he is not allowed to do in terms of agreement?
Customer: replied 3 years ago.

yes he is

Customer: replied 3 years ago.

The agreement does not mention anything about behaviour. It mentions that whatever is done for the business must be done mutually by both members. But he assumes that he is running the business.

And this is causing damage to the CC or to you personally?
Customer: replied 3 years ago.

Damage to both me and the cc. I have started this company from scratch 3 years ago, and i thought that the partnership will help, but all turned the other way. what can I do? i want him out.

Other than buying him out at an amount that is agreeable to you both, the only other thing that you can do is to approach the High Court to order the cessation of his membership interest under Section 36 of the Close Corporations Act.

A copy of the Act can be obtained here.

It is, unfortunately, going to have to be High Court and you would have to obtain the services of an attorney. The Section says that the court can make any order it deems fair, which can include an order that you pay him back the loan, but if your attorneys address the issue of damages, chances are that the court will take that into account before it makes a decision on whether he is entitled to anything.

It is, other than a negotiated settlement, your only option, unless the association agreement makes provision for a procurement of the membership interest from one member to another.

I am not sure what else I can advise you on, but if you have follow up questions before you rate, feel free to ask them at no extra cost. If you are satisfied with the service, kindly rate it positively. I do not get anything unless you rate the service.
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