Buying out the other director

[Lockhouse]

I was in exactly the same position many years ago. A business that I jointly went into with a mate went sour as I was doing all the work.

At the end of the day ask him what he'll take, halve it and make him an offer. If he says no then fold the company. Business and friends don't mix. You've probably lost this mate but you won't do it again.

[MarillionFan]

Pull the plug. Go Phoenix.

You don't need to close down a LTD at the first sign of a problem to get rid of a troublesome director/debt etc. Outside of contracting your LTD is able to build up 30/60 day terms with suppliers. Each LTD needs to trade for a while first to get these terms. Going 'phoenix' incurs costs to close, costs to open, accountancy, new LTD, new vat, new banks etc

Think of it like divorce. You only do it if you really need to.

It's the OP here who seems to be feeling guilty. That old adage about setting up with mate hey!

[conned tractor]

I'll keep you all posted.

Yes, certainly I've been a dickhead, but thought we were better than the old adage of mixing business and mates. So am I a moron, guilty as charged in this case.

[Scrag Meister]

1. Seek legal advice.
2. Remove from payroll. (Fire him)
2. Remove him as a director and ensure no access to cash.
3. Leave him as a shareholder, or buy him out.

As MF said, folding and phoenixing at this stage is an uneccessary overhead.

Tough decisions if he is a really good mate.

May save the friendship though as in the current situation its going the way of the bank balance and that is DOWN.

[VectraMan]

Maybe this helps a little bit:

Business Valuation Guide - How to value a business

Obviously people spend lots of money on accountants to do this sort of thing, but you could probably come up with a reasonable guesstimation of the value of the business based on the assets-liabilities and likely profits.

I also had a small Plan B with a friend providing a service, but he wanted to do less and I wanted to do more, so I just provided the same service to the same client through my Plan A co. We recently closed down the Plan B co. and split the small amount of money left, all completely amicably. But you can do that if it's a company built on a personal service.

And I know from working for a company that did the phoenix thing how many problems that caused (BT kept cutting off the phone lines because of the previous company's unpaid bill).

[Paddy]

I have also been there,

What I suggest is to get a set of accounts made up to date. This will show your profits (if any) and liabilities. The accounts then show that your partner owes you £xxx , get him to sign his resignation and buy his shares for £1 each in exchange for him having no further liabilities.

[Churchill]

You don't need to close down a LTD at the first sign of a problem to get rid of a troublesome director/debt etc. Outside of contracting your LTD is able to build up 30/60 day terms with suppliers. Each LTD needs to trade for a while first to get these terms. Going 'phoenix' incurs costs to close, costs to open, accountancy, new LTD, new vat, new banks etc

Think of it like divorce. You only do it if you really need to.

It's the OP here who seems to be feeling guilty. That old adage about setting up with mate hey!

Could still be cheaper than paying the freeloader off.

[doodab]

I have also been there,

What I suggest is to get a set of accounts made up to date. This will show your profits (if any) and liabilities. The accounts then show that your partner owes you £xxx , get him to sign his resignation and buy his shares for £1 each in exchange for him having no further liabilities.

Presumably if he's 50% shareholder then he already owns his shares. Surely that would give you somewhat limited room for maneuver when it comes to closing the company down?

[MarillionFan]

Could still be cheaper than paying the freeloader off.

Do you open all of your walnuts with a sledgehammer?

[Churchill]

Do you open all of your walnuts with a sledgehammer?

Nope, I crush them in my hands.