What can I do if my business partner wont buy me out?
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What can I do if my business partner wont buy me out?
We formed a company, both of us being 50/50 shareholders. We are both directors of the company. At the time we were silly and went by verbal agreement, that if either of us wanted out, the other would buy us out for the amount we put in for start up costs. She says that cannot afford to buy me out and wants to sell but on the condition that she gets to stay working there, self employed, retaining her clients and income. This has now scared 2 buyers off, as this is not a straight forward sale. What can I do to get my share of the start up back if she will not buy and is hindering the sale?
Asked on April 1, 2012 under Business Law, Illinois
Answers:
Glenn M. Lyon, Esq. / MacGregor Lyon, LLC.
Answered 12 years ago | Contributor
Unfortunately, you will most likely need to threaten a lawsuit or actually file one to do what you are asking. And you will need to prove that she agreed to buy you out in this situation, which can be difficult. The most likely scenario is to threaten to sue and negotiate a buy-out.
If you would like to discuss any issues further, please feel free to contact my office. Thank you.
Steven Fromm / Steven J Fromm & Associates, P.C.
Answered 12 years ago | Contributor
Stop messing around and get with a business or tax attorney. You should have done this BEFORE you entered into this arrangement. You will pay more as many people learn when they try to do these things on their own. By the way you have no legal right to demand that your partner buys you out; that should have been done through a binding shareholders agreement. But I guess you know that now.
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