Hi,

I am a managing director and a 50percent shareholder in a Pty Ltd company. My partner does not work in the business and also owns a 50 percent share. We both have loan accounts from money we put in to start the business. We do not have a loan agreement or resolution of any sort. My partners loan account is R 200 000 and mine is R100 000. When we started I verbally agreed for him to set the interest rate on our loan accounts at 5.5 % and for him to draw an amount of R 5000 per month, which included the interest. This payment has been made every month. As I draw a salary and run the business I did not ask for a monthly repayment on my loan account which was around R 50000 when we started and has grown through other amounts I have put into the business as well as interest.

After two years and our personal relationship ended,he has suddenly decided to increase the interest rate from 5.5 to 8.5 percent on his loan account. I have objected, but he tells me that I have no voice, and he is entitled to make adjustment as he sees fit, as he put up most of the capital in the beginning. He then went ahead and made the revised payment to himself from the business account. I told him that this was an unauthorized payment, but again I am told that I do not have a voice.

I know that I could also start claiming my loan account payments at the same rate, but I don't feel that that is in the best interest of the company at this stage. We are only two years old and I don't want to drain our resources which will blunt our ability to grow.

He has also stated that the business will not fund lawyers fees if I choose to go that route, as well as threatened to change the terms further if I rock the boat.

Has anyone got some good advice for me?