Questions

My business partner and I have irreconcilable differences and we are definitely splitting. I have 50% shares in the private company but we have considerable debt to the government at 200k. The company however is doing better and better and should be able to pay off all debt within 2 years. meanwhile the company (paris based web agency) is working with bigger and bigger clients including in the luxury sector and with its rising profile will soon be very profitable. I however after trying my best simply can't participate in the venture. I currently receive remuneration (like a salary) every month and i want to keep that for 6 months as i start to wind down my work as the art director and launch my own consulting business. Can i ask for that? what else can i reasonably request? i know you can make any deal you like and each company is different. but as a general rule, how do these things generally take place? My business partner and co-founder has previously made errors that are borderline illegal and i don't agree with how he runs the company. i do not however wish to take control or stay in any capacity. I don't have to sell my shares yet but what would be the best way to transfer out of the company into my own company?

I am involved in a similar action currently. I am negotiating a severance package (actually litigating it because the investors simply chose to not honor it).

Relationships change all the time. Divorce in business is common. First issue is to make this simply a business deal. The disagreement about the way the business has been run and, you will be aware, "borderline illegal" is 1) borderline, 2) difficult to prove, and 3) not relevant to the discussion since you just want to move on while retaining your ownership.

Key here is to keep your emotions in check and to manage the emotions of your co founder. Nobody wants a business to fall apart so make that clear. You wish them total success and cheer for them in the future.

Yes, 6 months is reasonable. They may want (you should check your corporate documents) to buy your shares back. If so, there should be a process there. You will need to have confidentiality agreements and non-competes for a period of 12 to 24 months, or as long as you are a significant shareholder.

The best advice is to tell your partner that you have come to this "difficult" decision, do not make it about him or his processes, and say "this is what I would like to do". Do not threaten or belittle anything and it goes faster, farther, and at lower cost.

You can email me at Dane@DaneMadsen.com or call me in Seattle at 206.900.5852 and I can share some thoughts.

Dane


Answered 5 years ago

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