Please I am not sure what to do here, an issue with my partner !

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Joined: Fri Feb 18, 2022 8:10 pm

Please I am not sure what to do here, an issue with my partner !

Post: # 94137Post Balhaji234
Tue Apr 12, 2022 2:49 pm

Hey I am facing a very hard situation, I have bumped into this forum, it isn’t my father passing away but my partner is a crook, well “happens “ to be a crook would be the right working as I didn’t see it coming.

Well let me tell you about it please as I need advice here, maybe any lawyer or business man knows what to do here, I don’t know I can see the forum is small but might have someone to help. I read the “ about us" section , maybe Amy can help me here?

So my problem is I have put money in a company, investing together with my partner, we have worked together side by side to launch our business, well being both directors.
Then we decided I would start lunch another business whereby we would both put investment and I would be running it while he would be running the first business we launched together (which started making money)
Well while I was establishing this other business he proposed to put only himself as director and we had me removed and I was fine with it as I was supposed to be running another business and in the same time he wanted to have rights alone as signatory of bank account (not especially joint) which when he proposed it I was fine with and I remember he said “because I will be accountable as being the director”..

Now I am in shock and don't know what to think and whether there is something to do here.
He has transferred to another account ,,a huge sum of our initial investment that was obviously supposed to stay within the company, and he says it is to get advice as of how to run the company some advising counselling purposes. He seems very trustable in the way he spoke to me about it...
The money is already transferred.
I need help here, would like any knowledgeable advice please!!
What would you have done tacitly/strategically whatever, at my place right now.
Maybe I am naïve and over trusting , should I ask a lawyer about it.

Posts: 8
Joined: Mon Mar 28, 2022 7:47 pm

Re: Please I am not sure what to do here, an issue with my partner !

Post: # 94138Post AnnBelmond1990
Thu Apr 14, 2022 10:30 am

Hello, I believe you should first address your issues with your partner before seeking legal advice. Inform him that you are concerned about this and that, if the situation remains unresolved, you should speak with a lawyer. But did he address this advising counselling with you? When you notice the transfer of money, it seems as if you just learned about it, and to be honest, it's a little frightening. Communication is essential for partners, especially when dealing with large sums of money that should have been in your company.

Posts: 7
Joined: Sat Sep 11, 2021 11:41 am

Re: Please I am not sure what to do here, an issue with my partner !

Post: # 94152Post lilo894
Mon May 16, 2022 8:27 pm

Hi Balhaji,

I understand your frustration and need of quick help here :idea, im in the train right now and i have time hence willing to help you as much as i can, By the way agree comletely with Annbelmond and the way she advised to proceed.

As per my own thought’ and view and I’m not an expert, just giving my views here,
First, yes, I think it is always good to ask a lawyer about it and yes I think you shuld. You can ask the lawyer in a "private and confidential way" as you want to have an advice before you decide what you want to do.

Then, as you have asked strategically what to do. Well, you have at least 2 choices obvious to me:
- Assuming your partner has good intentions, you could discuss the matter further with him and I would propose to review with him what is the job assignment he has given this advisory company and the price and modalities corresponding ,basically the contract verbal or written he has entered into with them. From there, you can discuss the possibilities to unwind it as a whole or partially.

If the above fails and he doesn’t want to enter into any kind of compromise or discussion, which may happen, then:

- If you ever took a lawyer for the company itself, as it is sometimes a requirement, in that case he should/could advise you with the matter and should act in the good interest of the company.
- If you have an accountant for the company, as it is sometimes a requirement, he could have been consulted by your partner and also you could consult him in that matter and what does he thinks to do here.
- If you have any written proofs on what you both have decided that he runs this business and you get to run a new business, its good to keep them. Also, did you bring any written decisions around this.

In the meantime you may want to know and enquire around the following, which once again is only personal thoughts and sharing ideas that you might want to validate with the lawyer.

Notwithstanding if you are or aren’t a director or whether you were removed, your partner has obligation, as a director, to involve shareholders and you still have pretty important rights as a shareholder and so it is interesting for you to consider:

- Have a look at the status of the company in which you should find some clauses related to what are the cases in which the company ( its board of directors e.g your partner in that case) cannot validate some propositions without your approval as a shareholder. Note that being a “majority shareholder” your rights/voice is pretty paramount since it could prevent a decision, in which you are not in favour, to be taken; So he probably cannot bring such important decision - engaging big sums - as a director – as a one regular daily decisions.
e.g: You should have been given the chance to vote on that proposition of engaging an advisory company for a big sum of money, in the first place; else it means that “the status of the company” are written in a way that the board alone can decide to engage a company for a job even above a certain value without the agreement of the shareholders.
In terms of you being a shareholder:

- Have a look at your shareholder agreement in which you will find different clauses that govern your partnership and your partner's obligations as a shareholder, it is common to find in shareholder agreement when the business involves only 2 shareholders, a clause around “joint decisions”, in that case both shareholders have to agree on important decisions (both agreement) otherwise the proposition cannot get a positive vote and pass.

e.g: what is in the redaction of the shareholder agreement ?>>is it both of you who need to agree for important decisions taken by the company or not? And are the sort of decisions referred as “important” listed? In that case, you should have had the right to refuse the proposition of engaging this advisory company.

Also note that having you removed as a director in the first place, should have brought amendments to term sheet/shareholder agreement. Have you? In fact, there is a potential important conflict of interest if he stands as a director while in the same time he owns the company as one of the majority shareholder, whereas on your side you are not a director. You should bring clauses that would cover this as much as possible. If you havent yet, then, as soon as the matter is resolved, i would have discussed this point with your partner and a lawyer to make things more balanced.

This comes to my mind and I hope it helps

Don't hesiatte to ask more if i have time tomorrow on my way back will answer. Have great evening


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