ltd business partnership buy out/closure
paulsm
Posts: 429 Forumite
I have a friend who is partners in a business, from hte start he invested more but on paper I think they are 50/50? he cant work with the partner as they have no interest and are not putting in the hours, what are the options? and outcomes ie split, buyout, closing business finance wise?
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And what does the partnership agreement say? You know, the piece of paper they drew up at the start, stating what would happen in various different scenarios, including one of them wanting to dissolve the partnership?
I think I know where this is going, sadly ...Signature removed for peace of mind0 -
I will ask him but I am thinking there wasnt much put down in writing to start0
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You say Ltd, you say partner. These aren't both likely to be true, and which is correct will decide things.
If ltd, one can buy out the other, for any agreed amount, or they can agree to dissolve the company and split the assets according to 50/50 after costs. Their accountant can advise.0 -
You say he invested more. If he bought more shares than the other, he'll be entitled to a bigger share upon winding up. If the "extra" is put down as a directors loan, that extra is due back to him by the company, just as any other loan would be.
It really will all come down to how it was set up, i.e. how much share capital, how much directors loans, etc., and yes, what formal agreement there was between them, i.e. a partnership or shareholder agreement.0 -
You say Ltd, you say partner. These aren't both likely to be true, and which is correct will decide things.
If ltd, one can buy out the other, for any agreed amount, or they can agree to dissolve the company and split the assets according to 50/50 after costs. Their accountant can advise.
I am not lieing about either Ltd co or partners, I dont see why you would think I need to lie about either, I am just trying to get info for a friend with what I know about the setup.0 -
I think the partner who is not pulling his weight does not want to sell his share or dissolve the company as he has his own agendas, what happens in this situation?0
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I don't think paddy was accusing you of lying, simply pointing out that there is a difference, and it matters whether or not it is a ltd.I am not lieing about either Ltd co or partners, I dont see why you would think I need to lie about either, I am just trying to get info for a friend with what I know about the setup.
That depends on what was agreed between them in the first place.I think the partner who is not pulling his weight does not want to sell his share or dissolve the company as he has his own agendas, what happens in this situation?
Your friend is unlikely to get any reliable advice without the original agreement. If it is a ltd company, then there definitely must be something in writing.Signature removed for peace of mind0 -
I am not lieing about either Ltd co or partners, I dont see why you would think I need to lie about either, I am just trying to get info for a friend with what I know about the setup.
Eh? I didn't make any implication that you were telling lies, and I don't imagine you would, or even care if you did or not!
You mention Limited Company, you mention Partnership - they're two distinct and fundamentally different ways to form a business with multiple principals. Because they're different, (ie it will be one or the other), and because the process and practices to wind up either formation will be different, it's important to know what formation it actually is.0
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