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    • paulsm
    • By paulsm 15th Oct 16, 11:53 AM
    • 380Posts
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    paulsm
    ltd business partnership buy out/closure
    • #1
    • 15th Oct 16, 11:53 AM
    ltd business partnership buy out/closure 15th Oct 16 at 11:53 AM
    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?
Page 1
    • Savvy_Sue
    • By Savvy_Sue 15th Oct 16, 11:58 AM
    • 36,812 Posts
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    Savvy_Sue
    • #2
    • 15th Oct 16, 11:58 AM
    • #2
    • 15th Oct 16, 11:58 AM
    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 ...
    I'm a Board Guide on the Cutting Tax; Charities; Small Biz & Charity Organisers; and Silver Savers boards, which means I'm a volunteer to help the boards run smoothly, and I can move and merge threads there. However, do remember, Board Guides don't read every post. If you spot an inappropriate or illegal post then please report it to forumteam@moneysavingexpert.com. It is not part of my role to deal with reportable posts.

    Any views are mine and are not the official line of moneysavingexpert.com
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    • paulsm
    • By paulsm 15th Oct 16, 12:59 PM
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    paulsm
    • #3
    • 15th Oct 16, 12:59 PM
    • #3
    • 15th Oct 16, 12:59 PM
    I will ask him but I am thinking there wasnt much put down in writing to start
    • paddyrg
    • By paddyrg 16th Oct 16, 2:12 PM
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    paddyrg
    • #4
    • 16th Oct 16, 2:12 PM
    • #4
    • 16th Oct 16, 2:12 PM
    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.
    • Pennywise
    • By Pennywise 16th Oct 16, 3:05 PM
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    • #5
    • 16th Oct 16, 3:05 PM
    • #5
    • 16th Oct 16, 3:05 PM
    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.
    • paulsm
    • By paulsm 16th Oct 16, 6:44 PM
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    paulsm
    • #6
    • 16th Oct 16, 6:44 PM
    • #6
    • 16th Oct 16, 6:44 PM
    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.
    Originally posted by paddyrg
    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.
    • paulsm
    • By paulsm 16th Oct 16, 6:46 PM
    • 380 Posts
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    paulsm
    • #7
    • 16th Oct 16, 6:46 PM
    • #7
    • 16th Oct 16, 6:46 PM
    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?
    • Savvy_Sue
    • By Savvy_Sue 16th Oct 16, 8:15 PM
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    Savvy_Sue
    • #8
    • 16th Oct 16, 8:15 PM
    • #8
    • 16th Oct 16, 8:15 PM
    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.
    Originally posted by paulsm
    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 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?
    Originally posted by paulsm
    That depends on what was agreed between them in the first place.

    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.
    I'm a Board Guide on the Cutting Tax; Charities; Small Biz & Charity Organisers; and Silver Savers boards, which means I'm a volunteer to help the boards run smoothly, and I can move and merge threads there. However, do remember, Board Guides don't read every post. If you spot an inappropriate or illegal post then please report it to forumteam@moneysavingexpert.com. It is not part of my role to deal with reportable posts.

    Any views are mine and are not the official line of moneysavingexpert.com
    Still knitting! Current projects: 2 shawls, 2 pairs baby bootees,
    1 Wise Man Knitivity figure ...
    • paddyrg
    • By paddyrg 16th Oct 16, 10:28 PM
    • 12,635 Posts
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    paddyrg
    • #9
    • 16th Oct 16, 10:28 PM
    • #9
    • 16th Oct 16, 10:28 PM
    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.
    Originally posted by paulsm
    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.
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