UKC

Following the death of SiL last year my BiL has a 50% share of her business until such time as(hopefully) the other 50% shareholder buys him out.

BiL is not actually doing any work for the company as he is neither qualified or experienced to do so. Unfortunately there has been a falling out between BiL and the other share holder who is actually running the business - we are doubtful that he is running it as it should be run - can't go into details.

Anyway he has told BiL that he wants nothing more to do with him(we think he will stop paying BiL a "salary") and that he will close the company down. We think he's on thin ice here - I imagine he cannot close the company without BiL's agreement.

Am I right?

In reply to mypyrex:

Was there any shareholder agreement? This would set out what should happen in the event that a shareholder wanted to sell their share in the business or dissolve the business.

IANAL btw...

OM

In reply to Owen Meany:

Don't think so other than that BiL was left his share in SiL's will. It's all very complicated.

In reply to mypyrex:

Sounds like you should talk to an actual lawyer.

In reply to dsh:

Agreed. If the company was dissolved, then your BiL would probably be entitled to half of the assets on liquidation, but someone who has close control of the company could probably manage the position on liquidation to their own advantage (if they felt so inclined).

I'd speak to a decent lawyer/specialist insolvency accountant asap

OM

In reply to mypyrex:

I'm not a lawyer, but I do have twenty years experience running businesses, which includes other partners/directors moving on. Depending on the size and nature of the businesses, share value is something that's very difficult to put a figure on - in fact your BiL's share, is probably only worth whatever the other person is willing to pay. This is especially the case if this business is within the service industry where there isn't any 'stock' (assets) as such, and therefore value largely resides in terms of shareholder's account and an agreed 'goodwill' element.

If the company is solvent, there is nothing to stop the other person effectively dissolving the company and restarting one in another name with no obligation to your BiL whatsoever. In this instance, all assets and liabilities are calculated and a profit/loss declared once tax, professional fees, long term lease obligations, etc are taken into considerations.

it's curious to read that your BiL is receiving a salary at all - this suggests he is employed by the company rather than just being a shareholder?

As everyone else has advised, speak to any decent accountant and/or business lawyer as a next step, but be prepared to walk away unless the value is really worth fighting for.

In reply to FrankBooth:

>



I have bugger all legal experience, and only about two years' experience running my own company, but many years experience of filling in tax returns, and even I know you're not allowed to pay a salary to someone who isn't actually an employee - so agree the OP's BiL needs to get some advice sharpish.

In reply to andy:

The OP may mean dividend?

In reply to climbwhenready:


Yes, I couldn't think what the word was

In reply to Owen Meany:


To clarify I think you mean an agreement between the late Sister in law and the other party, not between the Brother in law and the other party?

mypyrex I think you read it as the latter?

In reply to All:
Please consider matter now closed. Solicitors and accountants now dealing with matters. No further posts please.