my non-working partner blocks the sale of the company


My partner and I started the company 7 years ago. Organically grown, After 2 years he left to his home country in the pretext of developing and helping me. While I managed everything here, he was drawing the salary and he had the title of President & CEO. His was responsible to bring in investors which he failed. Spent lot of money on development... in the process he made his own company overseas.

While I was managing here, I brought an adviser to whom I gave 2% of shares. Developed new products and kept the company running all alone till Company started losing revenue couple of years ago and I found an investor who was able to take liabilities and give their shares. I told my partner to sign off... his demands grew out of proportion till it came to a point I said no as I was taking the risk of meeting numbers and he was not. He was in no hurry either as he had built his own business which I thought I was part of.... now I found out I was not on the paper.

Now, he resigned from his position and but keeping the shares and directorship. He doesn't want to recognize the 2% shares as I signed for that.
If I leave the company, I will lose the customers I have. I've an offer to take up the job but, I will end up taking those contracts with me as its my name which is on line.
What do i do?


asked Sep 10 '11 at 01:14
Frustrated Disappointed
16 points

1 Answer


What legal sctructure do you have in place? How could you possibly "give 2% of shares" to someone and not have it properly recorded by the company? And your partner was CEO, living abroad, receiving a salary, and according to you, not doing much at all?

I think you are up for a major shakedown, where everything needs to be cleaned up and everything can be renegotiated. If you messed up the legal side, then it's really a fresh negotiation: you most likely both have ways to kill the company. He probably legally owns it on paper, not you. But if you really run it, you can kill the business if you control the customers and day to day operations.

If you both have a nuclear option to destroy everything, talk and settle. It will be very painful, but just accept it.

answered Sep 10 '11 at 01:49
Alain Raynaud
10,927 points

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