About a year ago I went in with two partners in the development of a website, well a year later the site is up and running and the verbal aggreement was that they would be the investors. We have formed a corporation and equal in co. shares, but one of them has been not been completely been meeting the verbal requirement in the up keep of the co.
It seems that that partner is tired of investing in the monthly expenses of the co, and has been slowly delaying monies and until recently stopped and refused to pay anymore to maintain our co. structure in running forward.
My question is, what is the best way to deal with this situation in a moral, ethical and business way, cause it's not far that the other partner is still contributing in our business venture to support our cause to continue forward with our up and running website.
I have invested 150K, the other 150K and mr. no pay has only contributed 60K, it seems easy but want a more unbiased look in futher action, thank you.
2007-11-10 15:08:39 · 3 answers · asked by Steve S 1 in Business & Finance ➔ Investing
This is the reason you have to have a contingency plan in place BEFORE you start a business with partners.
If you and your other partner can't get this guy to agree to anything, your only option is to sue him in court.
Sit down with the other active partner and brainstorm about how much you are willing to pay the guy to go away and sign off the company and future rights. My gut feeling is he is going to want his $60k back plus "his share" of whatever he thinks the website is worth.
Make sure you low ball your buyout offer so that there is room for him to counter, and you to stay ahead.
Your situation sucks, but hopefully you will learn a valuable lesson about business partnerships. Make sure you and the remaining partner draw up a contract that addresses the situation for you both in the future.
Good luck
2007-11-10 15:14:50 · answer #1 · answered by Gem 7 · 0⤊ 0⤋
Get the agreement in writing. It doesn't matter if they're you brothers, when dealing with that much money and it's an agreement, get it in writing. as much as you trust your friends, don't trust them with that much money. Especially if one of them is not keeping up on their end of the bargain. Say if the partnership were to end and money was owed by a party and the resolution would have to be taken in to court. Verbal agreements are based purely on heresay. However a signed agreement could not be refuted. Keep you business life separate from your personal life. You lose money that way. also base the amount of influence on the company on how much each investor has put in. In your situation, Mr. nopay could not have an executive decision on how the company is ran without the support of another partner.
2007-11-10 15:19:18 · answer #2 · answered by Anonymous · 0⤊ 0⤋
This should have been one of the things covered when the partnership was formed (IN WRITING) if not then; it definitely should have been addressed when the partnership moved on to become a corporation.
2007-11-10 15:38:22 · answer #3 · answered by don_sv_az 7 · 0⤊ 0⤋