Selling shares of business and settin up new one with "poached" clients

millysg1

I was looking for some general advise.


My husband has a 40% share of an Electrical company, his partner has the remaining 60%. This has worked for 3 years now but my OH does majority of the running of the business and has gotten pretty fed up of his partner.


Recently, their main client has gotten so fed up of the business partner that they have told my OH that they will no longer use them while the business partner (BP) is still involved (this is down to the BP highly over charging them too many times against my OHs advice).


They want him to go out on his own so we have started setting up a new company and have told BP we are leaving the business at the end of March. OH will finish off the year books, take his share of the profit (dividend) and give back his shares (we aren't even selling them).


But BP today has says he is drafting a contract about not "poaching" contracts.


We don't want to sign it and as there is no Shareholder contract in place there isn't anything enforceable at the moment. But as their clients (who provides 80% of the business' work) have told my OH that they don't want to use the BP anymore, would this still be classed as poaching or soliciting?

AbbieCadabra

I think professional advice would be a very good idea in this situation, this guy posts regularly on ukbusiness forum & is very good, http://www.theresolver.com

millysg1

thank you for that, ill post there.

paddyrg

Might be a bit late to write a 'no poaching' contract, after all why would your hubby sign it? As a 40% shareholder it's not automagically a part of his terms. If they are renegotiating his employement contract, that's a renegotiation in itself. It can't affect his dividend.

HOWEVER there's going to be a whole load of blood over the carpet if you're not careful. And professional advice is essential

One option I could see is for your hubby to approach a competitor and offer to introduce the client (along with a fixed-rate deal for first x years or whatever) in exchange for some shares of someone else's business. Then carry on as before. The current 60% shareholder will soon own 60 (or 100)% of the remaining 20% of the jobs and hubby can take employment with the competitor. Or something like that - little bit underhand in execution, but it's pretty clear the hubby isn't poaching a client, but a client got so hacked off they left one supplier for another.