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Ben Jones
Ben Jones, UK Lawyer
Category: UK Law
Satisfied Customers: 9118
Experience:  Qualified Solicitor - Please start your question with 'For Ben Jones'
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My name is ***** *****, i am 50% owner with my business

Customer Question

Hi My name is ***** *****, i am 50% owner with my business partner, our company is on the verge of failing, however we have the opportunity to merge & i have an investor who is willing to come in & push the merger through as it will secure the business long term (Moving premises with significantly lower overheads, and the merger will also almost double our membership). However my co director is unwilling to transfer her shares becasuse as she puts it "She has put to much in to let it go". She seems to not accept that if this doesnt happen then the business will fail & she will lose her investment. I am currently stressed to the max as im looking at ways i can either A) force her to transfer/sell her shares or be protect myself & still make the merger happen. My investor will only come in as equal partner with myself as its me who has slogged his guts out for 3 years building the business up & building relations with the community. Any advice is much appreciated.
JA: Thanks. Can you give me any more details about your issue?
Customer: The business is a gym, we have run for 3 years and we picked it up after it had previously been closed. My co director is a virtually silent partner. I manage the club on a day to day basis & it is myself whose name is ***** ***** lease of the property we rent. I basically want her to sell her shares at nil value (As per their value in a loss making company) and allow the club the chance to move & merge. However she is unwilling & seemingly thinks a magic solution will rescue the day!
JA: OK got it. Last thing — Solicitors generally expect a deposit of about $18 to help with your type of question (you only pay if satisfied). Now I'm going to take you to a page to place a secure deposit with JustAnswer. Don't worry, this chat is saved. After that, we will finish helping you.
Submitted: 1 year ago.
Category: UK Law
Expert:  Alex J. replied 1 year ago.

Hi, Thank you for your question and welcome. My name is ***** ***** I will assist you. Does the company have any assets that can be saved if the company went insolvent? Does it have any long term contracts that would be terminated by insolvency? Would the shareholder sell her shares if the price was right?

Customer: replied 1 year ago.
Hello AJ, thank you for your reply, we have physical assets that can be saved however the only contracts that would be lost on the income front would be the members who have paid to take out a membership & use the gym.
Expert:  Alex J. replied 1 year ago.

Hi, Thank you. You could consider putting the company into administration and transferring the assets to a new company? Have you loaned any money to the company?

Customer: replied 1 year ago.
Other than our initial directors loans no i havent. However there is 12,000 that is owed to a friend who invested 12 months ago, they are pressing for it back now.The only other outstainding issues we have are this quarters VAT which is due shortly, a little bit of PAYE which will be due & that will be it.
Expert:  Alex J. replied 1 year ago.

Hi, Thank you. What you could do (although there will be some expense to this), is get your friend to put the company into liquidation, form a new company and then try and buy the assets from the old company as a going concern. If you proposed letting the company fail would the other shareholder likely react to this? Kind regards AJ

Customer: replied 1 year ago.
That is something i have proposed to her today & she wasnt keen as she says "She will lose all her money!"...
Expert:  Alex J. replied 1 year ago.

Hi, Thank you. The only way for her to leave with some money is to accept for you to buy her out - if it is not an option that you stay in the business together, then the end result will be in insolvency of the business. If she cannot appreciate this point, then all that will happen is the creditors will catch up with the company. Does she want to carry on working with you?