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Thread: Suggestions and assistance needed on worrying situation in Closed Corporation between partners

  1. #1
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    Suggestions and assistance needed on worrying situation in Closed Corporation between partners

    We are currently caught up in a very messy situation if you ask me.

    If anyone can by any chance please assist me with a solution on the

    One of the members in our CC own 50% (who at first said he wants to be a silent partner)
    however overrule, manipulate and control major decisions. Ie. Appointed the first
    accountant himself, changed to a next accountant without consulting with any of us.
    Appointed the current bookkeeper at his company to create an additional user on their
    current bookkeeping system for us. Allowing her to our business bank account to capture
    payments and his wife only to release these payments. On insisting that at least one more
    member have access to our own bank account, he in December and in a meeting in January
    refused and had rage attacks on both occasions. On both occasions he threatened to rather
    sell his 50% share and told us to make him an offer. His wife (an attorney) and have they
    got the advantage of easy access to legal assistance. (They do however send us bank statements
    and prove of payments daily, but cant I understand why they dont want to allow any additional
    member (access only) on bank web account for viewer only)

    His last rage were because we didnt agree to the demands and unreasonable privileges he
    required for himself/themselves and restrictions on the other members, on the Association Agreement
    they insisted on drafting themselves. The franchise we joined require this agreement since we
    started, and did this member drag their feet on this for some reason. In the meanwhile he got
    involved with another business venture which is in direct conflict with our business, by dealing
    with competitors and privately. If franchise do find sufficient evidence of this, he will be forced to sell, but
    do the member cautiously go about all.

    We however did ask him if this latest threat to sell was serious, whereby they now accuse the rest
    of the members of wanting him out (or almost forcing), surely we needed to know if this is/was a serious offer to sell?

    This member finally wrote an email to inform us that his 50% share is up for sale and gave us 7 days
    to respond. Demand the amount that he bought in for (10 months ago) + the expenses he had on
    his own (which was never discussed or approved by any other member before proceeding and the
    company didnt benefit from).

    Early this week we made an offer for just above the price he bought his 50%. Whereby he replied
    that the offer was much to low because the offer he received was for the 50% share in the CC + the property
    we rent from him and run our business from. (which is ridiculous) According to my understanding,
    current members have first option in buying, but what if selling member demands more than what he contributed?
    (Selling his shares in the CC + the property as a package, really?)

    Can this only be a trick to fool around, so he in the end keep control over finances and other decisions if it seem like no one
    can afford buying his shares?

    This situation is currently driving us up the wall, as we are all actively working in the CC and
    does this have a very negative influence on our productivity.

    I would dearly appreciate everyone's input in this, and as this is
    our money and investment in our future, it is an extremely serious situation.

    Looking forward hearing from you.


  2. #2
    Diamond Member Justloadit's Avatar
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    My understanding of 50% means just that, he may as an individual have the most shares, but collectively he still owns only 50% which is not majority share. In other worlds, the other members can vote their 50% as well. What happens is a stalemate occurs. Now part of the founding statement should have a proviso for this, so with out knowing more details it is difficult to make any further suggestions.

    IMHO you should contact a 'business/company law' lawyer, as it may be a very complex case to simply make suggestions on an open forum such as this.
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