Desperate for help with partner dispute in ltd company

Always_trying

Hi - not sure if this is the right place to post this.
I met a guy 3 years ago, we had a relationship. we both invested a large(ish) amount of money (mine was from my house sale) into a business and created a limited company. We are both 50/50 directors. We bought 8 building plots. I kept my part time job until the company had sold a couple of houses so it could afford to pay the both of us a very small salary. I left a good government job/pension where I'd been 32 years. I'm now 52. Probably this wasn't a good idea on hindsight.

Anyway for the past 12 months at least my partner and business partner has turned out to be a total bully. I have been sworn at, screamed at, called all sorts of names, controlled, bullied. This has been in front of other workers at the site. Everyone is aware of what he's like, especially with me. It's his way or no way. I am not a weak person but he scares me and there is no reasoning with an unreasonable person. He total believes his actions are justified. A week or so after an outburst he continues like nothing has happened!!! We are no longer in a personal relationship but it's clear that he still wants or wanted to be.

I just desperately now want to get out of this company. We are now in a situation where we can take our initial investment back. We have three more houses to sell. Our tax year ends on the 31/10. All I want to do is sell the remaining 3 houses, we will be in profit, pay the corporation tax and take the profits as dividends over the next three years or so. He is totally refusing to do this (that's putting it mildly - I've suffered dreadful abuse when I've mentioned it). He is determined not to pay any tax. He wants one of the last two plots gifted to him by the company. He wants to 'hide' the cost of the build and claim the house as his own. Or he wants us both to do that (however now he is saying he will not live next door to me) , the company will make no profit and we will be left with a house each.

I am going to tell him on Monday that I will not do this, I will not do anything dishonest or underhanded. I have been to see our accountant alone and told him the situation. (he threatened me not to do this). We have come up with a proposal. 3rd house left is sstc and should go through in May. We will make a small profit this financial year and only have to pay a small amount of corporation tax. The proposal is to then split the company. Leave the sale of the last two properties until after the 1st november. we then split the companies. I pay the tax and take the dividends (agreements will have to be in place I know) and he can either re invest (and do future tax fiddling) or take a house or whatever.

This hasn't been put to him yet but any mention of paying tax has led to him telling me that he will refuse to sell the remaining houses, or take me to some sort of litigation?

I am now really worried/scared as I feel I am potentially about to lose everything. All I've done is put 100% into this business and worked really, really hard. What I haven't done is want to continue in a relationship with an aggressive angry nasty man.

I'm worried now that if I refuse to do his dishonest suggestion and he refuses the new proposal we will be at stalemate. My question is if he refuses to continue to build or sell the remaining houses what can I do?? Please help I'm desperate.

Aquamania

Always_trying wrote: »

Hi - not sure if this is the right place to post this.
I met a guy 3 years ago, we had a relationship. we both invested a large(ish) amount of money (mine was from my house sale) into a business and created a limited company. We are both 50/50 directors. We bought 8 building plots. I kept my part time job until the company had sold a couple of houses so it could afford to pay the both of us a very small salary. I left a good government job/pension where I'd been 32 years. I'm now 52. Probably this wasn't a good idea on hindsight.

Anyway for the past 12 months at least my partner and business partner has turned out to be a total bully. I have been sworn at, screamed at, called all sorts of names, controlled, bullied. This has been in front of other workers at the site. Everyone is aware of what he's like, especially with me. It's his way or no way. I am not a weak person but he scares me and there is no reasoning with an unreasonable person. He total believes his actions are justified. A week or so after an outburst he continues like nothing has happened!!! We are no longer in a personal relationship but it's clear that he still wants or wanted to be.

I just desperately now want to get out of this company. We are now in a situation where we can take our initial investment back. We have three more houses to sell. Our tax year ends on the 31/10. All I want to do is sell the remaining 3 houses, we will be in profit, pay the corporation tax and take the profits as dividends over the next three years or so. He is totally refusing to do this (that's putting it mildly - I've suffered dreadful abuse when I've mentioned it). He is determined not to pay any tax. He wants one of the last two plots gifted to him by the company. He wants to 'hide' the cost of the build and claim the house as his own. Or he wants us both to do that (however now he is saying he will not live next door to me) , the company will make no profit and we will be left with a house each.

I am going to tell him on Monday that I will not do this, I will not do anything dishonest or underhanded. I have been to see our accountant alone and told him the situation. (he threatened me not to do this). We have come up with a proposal. 3rd house left is sstc and should go through in May. We will make a small profit this financial year and only have to pay a small amount of corporation tax. The proposal is to then split the company. Leave the sale of the last two properties until after the 1st november. we then split the companies. I pay the tax and take the dividends (agreements will have to be in place I know) and he can either re invest (and do future tax fiddling) or take a house or whatever.

This hasn't been put to him yet but any mention of paying tax has led to him telling me that he will refuse to sell the remaining houses, or take me to some sort of litigation?

I am now really worried/scared as I feel I am potentially about to lose everything. All I've done is put 100% into this business and worked really, really hard. What I haven't done is want to continue in a relationship with an aggressive angry nasty man.

I'm worried now that if I refuse to do his dishonest suggestion and he refuses the new proposal we will be at stalemate. My question is if he refuses to continue to build or sell the remaining houses what can I do?? Please help I'm desperate.

I'm not quite sure what you mean by "50/50 directors"

Companies are owned by shareholders who employ directors to run the company in the interests of those shareholders. (shareholders cann also be the directors)
If you mean you are both directors (and assuming there is nothing to suggest one reports to the other e.g. because one is the managing director) then it's ultimately down to the shareholders. Shareholders can (usually) remove the directors if that is what they want.

Most shareholder resolutions require a simple majority. The problem is, as you indicate, that if there are only 2 shareholders who each own exactly 50% of the shares, stalemate situations can easily arise where there is a failure to agree. (Hence why the advice often is not to have companies where, in case of dispute, a majority vote cannot be achieved)

So yes, it does sound like you may well end up in stalemate. Remember if this "bully" only has 50% of the shares (and you the other 50%), he also cannot force the company to do anything without your agreement.

I suggest you seek independent legal advice if, as your imply, he has suggested he will attempt to take legal action against you. That will also give you the chance to discuss the legal possibilities of what he suggests (and if it is possible/legal) how to protect your own interests if you eventually decide to agree to those type of terms.

The internet, especially a forum where anyone can post anonymously, is not the place to seek such legal advice.,

tacpot12

The suggestion to split the company might be the easiest way forward. If you both take one property, (you into a new company) you can sell, pay the tax and close your company down, he can do whatever he wants with his property. The only agreement you might need is on who pays the costs of the split. You want the split so it would not be unreasonable to expect you to pay the cost to transfer ownership of one property to a new company.

If not sure what the tax implications of the split might be. You will need an accountant to advise you if a split is going to trigger exactly the tax charge that your partner wants to avoid.

Another option mihht be a buy-out, where your sell your share in the company for something approximating the value of one of the properties. Again, you need an accountant to explain what the tax implications are. Your current acccountant might be able to give you advice but they might not be able to do so without sharing this advice with your partner.