beach chick Posted May 23, 2011 Share Posted May 23, 2011 I am looking into this for a friend, but am not quite sure where to start!! This is the situation below; where is a good source of advice? solitor? accountant? small business info on t'interweb? Friend A is in business in joint partnership with B. when they started the business, they both put in the same amount of initial investment. It is a limited company, equal shareholding; A and B are both directors and there is one other employee. Several years down the line, A has funded the business to quite a major extent, to the point where she is owed a lot of money by the business. B is owed some money, but very little. The money is not there to pay A what she is owed, and A is not quite sure why.... so clearly she needs to go through the books with a fine toothcomb for starters! A is the brains and also the 'doer' of the business and often works 6 days a week plus evenings doing admin. B is supposed to be sales, but in fact doesnt do much and to compound things further now has complicated childcare arrangements which were not the case at the start. B arrives an hour or so later than A, leaves at 2.30 3 days of the week, and does not come in on Fridays - all due to childcare. B also uses her company vehicle - and therefore fuel - for the school runs etc. None of this was 'agreed' at the beginning, apart from the Friday thing when B is meant to be 'working from home'. A and B are both paid the same salary by the business despite the discrepancy in skills/time input. It has reached the point where A is considering ending the partnership, but wants to carry on the business herself rather than letting it all go and still being owed a lot of money. A would be extremely capable of doing the whole thing - keeping the employee on; without B's (minimal) input, and without the cost of B (salary, NI, vehicle etc), the business would become profitable very quickly. A doesn't like confrontation but has had a discussion with B about where the business is going and aired some concerns about the financial situation. B says A is being "stressy" - well, as A does all the work I can understand that! SOOOO, if you got to the end of that, well done!! any ideas on good sources of advice? I am googling things like 'small business legal advice' but actually finding something helpful is a bit like looking for a needle in a haystack... thank you in advance for any pointers! Quote Link to comment Share on other sites More sharing options...
yvonne Posted May 23, 2011 Share Posted May 23, 2011 As an accountant, I'd say a lawyer would be a better first port of call - obviously an accountant will be needed at some stage to split the business assets on a fair basis, but maybe CAB or a firm of solicitors specialising in small business work would probably be a good starting point. Quote Link to comment Share on other sites More sharing options...
Bramble Posted May 23, 2011 Share Posted May 23, 2011 Business Link is very useful and you might find a local "branch" that can recommend solicitors/accountants etc that can help. As Yvonne said, I think a Solicitor/Legal Advisor is needed in the first instance, but then an Accountant's advice might be needed on Tax and other stuff. Quote Link to comment Share on other sites More sharing options...
beach chick Posted May 23, 2011 Author Share Posted May 23, 2011 great, thanks Yvonne and Bramble, I will tell her that solicitor is first port of call. sometimes its difficult to know where to start!! Quote Link to comment Share on other sites More sharing options...
Olly Posted May 23, 2011 Share Posted May 23, 2011 A needs to see a solicitor. What you're describing above is not, in fact, a partnership but a limited company - different rules apply. Unfortunately if they are equal shareholders, then there is probably not much A can do about it except make B an offer to buy her out - a solicitor is best placed to advise on the options, however. An accountant might be able to help with looking at the books. Quote Link to comment Share on other sites More sharing options...
chickencam Posted May 23, 2011 Share Posted May 23, 2011 You need a solicitor, there are many who specialise in business. Often you can get a free half hour assessment of your needs, I think the scheme is called Lawyers for Business, but most will do this if approached. Quote Link to comment Share on other sites More sharing options...
beach chick Posted May 23, 2011 Author Share Posted May 23, 2011 A needs to see a solicitor. What you're describing above is not, in fact, a partnership but a limited company - different rules apply. Unfortunately if they are equal shareholders, then there is probably not much A can do about it except make B an offer to buy her out - a solicitor is best placed to advise on the options, however. An accountant might be able to help with looking at the books. yes Olly, you're right, it is a limited company. A does not have the money to 'buy' B out; and A is owed probably 10 times as much as B. I guess that despite the fact that A has funded the business, B still has equal rights to any assets? legal time methinks. Quote Link to comment Share on other sites More sharing options...
freddie Posted May 23, 2011 Share Posted May 23, 2011 but, if the business in in debt, does the debt become both parties' responsibility? A partnership must be wound up legally, even if it wasn't started legally. saves all sorts of trouble later on. Quote Link to comment Share on other sites More sharing options...
