Disolving A Company Partnership

[Rabster]

Ok here is the situation

I am involved in a company as a buiiness partner with a 50% stakehold the other person wants out but doesnt want to be bought out but does how ever want to buy me out

i dont have a big problem with this as i ran most of it however the problem lies in if i let him buy me out what price do i go for we are trying to avoid using solicitors etc so we both dont get abused lol

the way i see it is

for example (not acurate figures)

i have put in £20,000 in equipment in and we have made £30,000 in profits last year

so the way i see it is i leave with my 20,000 in equipment plus £15,000 for my shared assets

but if we made 30,000 last year what is to say we wont make that again this year and by buying me out do i not have a stake in the projected future work which i know till christmass is aprox £12,000 so i know i am entilted to half of this as it was booked whilst the company partnership was in full swing......

so it boils down to future profilts the assets and my original input we have agreed on but unsue about the rights to future work that the company has built up

does any one know the best way short of the 6foot under root and taking full controll my self not that i would ever be thinking things like that lol

cheers people

[aaronabbott]

hang on a min he wants out ok,but he wants to buy you out therefore wants you out and he stays in

[WylieCoyote]

hang on a min he wants out ok,but he wants to buy you out therefore wants you out and he stays in

That's how I understand it too.

[Y2Kanjar]

yeah i can't get my head round that

[Tango]

yeah i can't get my head round that

Presume he wants out of the partnership, not the Company.

[aaronabbott]

yeah i can't get my head round that

Presume he wants out of the partnership, not the Company.

yeah but he wants to buy rabster out not the other way round,

im so confused

[Tango]

yeah but he wants to buy rabster out not the other way round,

im so confused

He just doesn't like or perhaps doesn't want to work with Rabster any more

On the split I'd have thought you'd walk away with (in your example) £20K for the equipment less the assessed depreciation/amortisation cost, plus £15K share of profit, less tax (unless this has already been deducted). On the possibility of future profit share, I think the only way to sort this out is to agree on some kind of 'goodwill' figure, e.g 50% of the projected profit for the next financial year.

[dave1]

Ok here is the situation

I am involved in a company as a buiiness partner with a 50% stakehold the other person wants out but doesnt want to be bought out but does how ever want to buy me out

How can he want out if he doesn't want to be bought out? Surely if he wants to buy you out he doesn't actually want out he just wants you out! Also, is it a registered partnership?

The profit last year is really immaterial unless it was left in the business. You would need to get an accurate figure regarding the assets of the business including any credit and debit liabilities and take it from there. Your random figure of 20k ingoing would be subject to capital writedown as you say it was for equipment which would now be worth less than the 20k it cost. The writedown would then be offset against taxation so may already have been allowed for in after tax profits. I don't really see how you can resolve this without the involvement of accountant/solicitor which again will be deductible against profits of the business.

[aaronabbott]

yeah but he wants to buy rabster out not the other way round,

im so confused

He just doesn't like or perhaps doesn't want to work with Rabster any more

On the split I'd have thought you'd walk away with (in your example) £20K for the equipment less the assessed depreciation/amortisation cost, plus £15K share of profit, less tax (unless this has already been deducted). On the possibility of future profit share, I think the only way to sort this out is to agree on some kind of 'goodwill' figure, e.g 50% of the projected profit for the next financial year.

i surpose that would be fair and goodwill it would be but business very rarely is made of goodwill,

say your on dragons den and one of the dragons said ill have 50% of your company and when the business is up and running decides they wany to buy you out,they wouldnt say you can have a percentage share in the future income would they,they want it all for them 100% thats the point of buying the other partner out.

[TheDon]

sell him 1% of your share and sit back and let him control the company..

This just sounds to me like he wants to go it alone, and the only reasons i can see for that is if its either not working for you both together.. or he has predicted that there is more money to be made in the next 3 years and wants it to himself.

Im not sure what you do for a business but in the end just getting your "half" is not really fair in my opinion.. as your initital work etc into the company and investment will have got it to the point of sale, and if your not making money then there was little or no point.

I would look at the future 3 years worth of work on the books or projected and look at that as a figure for buy out as otherwise i would retain a decent share of the company and become a silent partner just taking money out in dividends etc.

But there is no way i would do any of this without a registered professional.. it will save you in the long run.. and it will save him from screwing you over.

But in the end if he can float the money to buy you out then there is something there that he isnt telling you

Also what would need to be agreed in the sale? would you have to relinquish your rights to operate or trade within the trade? could you use your current customer base? in the end your money and work helped get the company where it is...

[Rabster]

OK sorry guys

basicly he is having a midlife crisis i told him to go buy a Porsche but he would rather buy me out the company

The company in the past 17 months had grown frmom 2 small little companies to a company that is in 2500sq foot warehouse with a small client base with regular work from these clients.

i offered him a few options for example

He buys me out of 20% of my company share therfore making him the majority shareholder, he was not intrested in this but at the same time he doesnt know what he wants

i then sugested to make the company a LTD company and me as a asset holder therfore no finacial decisions have to be made through me i just get rich on the profits and of course doing some work along the way, he was not intrested in this but at the same time he doesnt know what he wants

the only option he wants to go down is to have sole controll and me out the company but the strange thing is he wants to pay me to work for the company and run certain aspects of it therfore making me an employee

the problem i see with this is it makes no buisness sense pay someone to leave the company then pay them to work for it why not just put more money into it to make it grow even more

i think it boils down to the fact the company has grown more than he anticipated it would, his phrase when we had this meeting to discuss it the other night was "i want to be able to choose what work i take on and when i invoice for it" which to me isnt good buisness sense he also said "i dont want to have to answer to where i spend the money"

anyway i been a bit sneaky and i have registered the company in my name with companies house and bought the web domain

just need to work out how much i want him to buy me out for

my guessing on the figures stated in my 1st post

£15,000 for my shared assets

£6,000 of work till christmass

£15,000 technicly im entitled to this i belive as future work next year however i was going to settle for half that again to alllow for the cost we would outlay for some of the jobs

how does that sound people ???

[aaronabbott]

to me it sounds he knows what the business is worth in the future and wants it all

[Rabster]

thats kinda what i was thinking but without being big headed he ran his little company from his home till i came along i got the company into a large space etc and built up the clients through the work we did but i cant she how it will keep trading without me lol not being big headed

[aaronabbott]

thats kinda what i was thinking but without being big headed he ran his little company from his home till i came along i got the company into a large space etc and built up the clients through the work we did but i cant she how it will keep trading without me lol not being big headed

not being big headed at all mate without your help the company wouldnt be where it is now,you've done all the hard work he wants to sit back and reap the benefits

[Rabster]

yeah but i can sit back and smile knowing the following facts

i own the company name, the company website, half the company assets, the partner doesnt drive so no way of doing the work and to hire me and my knowledge and my driving license i think my requested amount has just trippled lol

[Mr Mole]

yeah but i can sit back and smile knowing the following facts

i own the company name, the company website, half the company assets, the partner doesnt drive so no way of doing the work and to hire me and my knowledge and my driving license i think my requested amount has just trippled lol

Take what you think is a good deal. Then start up another company doing the same work,keep all your old customers.

Then put him out of buisness

[KnightUnit]

yeah but i can sit back and smile knowing the following facts

i own the company name, the company website, half the company assets, the partner doesnt drive so no way of doing the work and to hire me and my knowledge and my driving license i think my requested amount has just trippled lol

Take what you think is a good deal. Then start up another company doing the same work,keep all your old customers.

Then put him out of buisness

I agree with this, if its a format that works for a company. get a good price for your share, set up with no debts and build the company how you want too for yourself.

[Rabster]

well luckily this was my company to start with and to this day remains my company i run a similar company to this elsewhere so the money would just further me to get more equipment and focus my talents elsewhere, i just got to work out how much 2 go for lol

[Y2Kanjar]

Sounds like he wonts you out and keep the $$ for himself...

i think you should buy him out and get him run it.....

or just don't sell and stay they way you are

[Rikos]

Your partner doesnt sound like he knows how to run a business in my opinion and i think he is a fool to run into any decision if he doesnt even know what he wants! You dont want to rush into making a decision just because he wants you too!

Dont forget this is your business and income too. I also agree that any sale of a business should be done through solicitor or accountant as you may not get the best for you or you may have legal problems further down the line.

[84Stoney]

yeah but i can sit back and smile knowing the following facts

i own the company name, the company website, half the company assets, the partner doesnt drive so no way of doing the work and to hire me and my knowledge and my driving license i think my requested amount has just trippled lol

yeah but i can sit back and smile knowing the following facts

i own the company name, the company website, half the company assets, the partner doesnt drive so no way of doing the work and to hire me and my knowledge and my driving license i think my requested amount has just trippled lol

Take what you think is a good deal. Then start up another company doing the same work,keep all your old customers.

Then put him out of buisness

Yes mate. Sounds like you brought the equipment, the knowledge and the business accument. What does this other guy do?

Let him buy you out but up the price, stating future potential etc. then set up alone and beat him at his own game.

Obviously the proper way would be to have to business officially valued and 50/50 it.

[Steve ( West Mids )]

I think there is only one way to do it, wait for him to confirm what he wants to do and they jointly pay for a professional valuation of the company and agree a buyout ( if that's what he wants ) based on that. What he pays you should be based on valuation of assets at current value ( not purchase price ), valuation of stock, future signed orders and goodwill.

[Steve]

you should get all your assets back plus split 50% of the projected profit for the next 3 years

[TheDon]

i definately feel like he knows something and is keeping it from you.. and to be honest if he doesnt know what he wants he is either a bad lier or a bad business man... either way you may be better off not carrying him... get all your money back plus the three years split proffit as a bare minimum..

take your clients in with the deal, as at the last min he could conclude that in purchasing you out of the company he is also buying sole rights to the clients which could land in court etc if not nailed down precicely..

Is he in money trouble? or has he booked a slot on dragons den? these things dont just appear from a mad night of drinking.. someone who wants a no questions asked financial control combined with work type is definately doing something that he knows you wont like.. im not sure what your current company does.. but as i always say.. money between friends is a bad thing.. and you need to separate yourself from it all now before it gets ugly.

[Rabster]

i definately feel like he knows something and is keeping it from you.. and to be honest if he doesnt know what he wants he is either a bad lier or a bad business man... either way you may be better off not carrying him... get all your money back plus the three years split proffit as a bare minimum..

take your clients in with the deal, as at the last min he could conclude that in purchasing you out of the company he is also buying sole rights to the clients which could land in court etc if not nailed down precicely..

Is he in money trouble? or has he booked a slot on dragons den? these things dont just appear from a mad night of drinking.. someone who wants a no questions asked financial control combined with work type is definately doing something that he knows you wont like.. im not sure what your current company does.. but as i always say.. money between friends is a bad thing.. and you need to separate yourself from it all now before it gets ugly.

apparently his aunt and uncle want to help in on his way and think the only way is to buy out the current partner, BUT he does not have any aunt and uncles left well that i know off and i know most his family lol

your right i think he is getting rid of me because he wants to do things i dont like, for example he is employed at a school on a part time basis and lets just say he is doing something he shouldnt be doing there with a duty of care position etc

plus the prices he has been charging for some things i think is questionable infact the prices he uses are not to high but way way way to cheap sometime not even making a profit

IM going to take the money and run and watch him screw it all up then buy the company off him for a reduced rate further down the line and not use him lol