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unsure what can be done

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  • 28-12-2006 12:24am
    #1
    MMW
    Closed Accounts Posts: 36 ✭


    A little story

    Four women started a small business together,
    all four contributed equal amount of money,
    only three gave total time and effort in promoting business,
    fourth woman only seems in it for easy ride, (thinks business can't survive without her even though she's the least qualified)
    fourth woman causing arguements with other hard working women on a daily basis, customers starting to spot this,

    Question: how can three hard working women tell this lazy freeloader to hop it?


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    #2
    Nuttzz
    Registered Users Posts: 3,774 ✭✭✭Nuttzz


    short answer, buy her out but it all depends on how the thing was set up


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    #3
    Littlepete
    Closed Accounts Posts: 17 ✭Littlepete


    Yeah i'd aggree, buy her out (value the company and offer her 25% of its value both tangible and intangible assets). If she refuses you could try to freeze her out. Decide that all profits are to be re-invested / held in the corporation and only wages based on hours worked will be paid out to owners, these can be generous. That way she wont be seeing very much cash flow from the business and may become keen on selling out.


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    #4
    antoinolachtnai
    Registered Users Posts: 9,787 ✭✭✭antoinolachtnai


    Has this person been talked to about this issue? If they have, and this has gone on for quite a while, obviously she has to go.

    A lot depends on the circumstances. You need to figure out what can be done if the worst happens and the other party is intransigent. One option is to wind the company up and just start again. This is not necessarily straightforward, especially if there are leases or property involved. Another is to issue new shares, thereby diluting the existing party (assuming this is a limited company). Another is just to carry on as you are, but never paying any dividend to shareholders, only paying people based on how much work they do or business they bring in.

    If this is a partnership (i.e, not a limited company) be extremely careful. Everyone is potentially responsible for debts that one partner runs up.

    That's all the gotchas and preparatory. In reality, no matter what the legal situation is, what the three other shareholders are going to have to do is to agree a position between them on what they want to do and how far they are prepared to go, then nominate one of their number to go and negotiate what it's going to take to get the forth person to leave.


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