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Company Ownership Issue

 
 
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tehnath
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PostPosted: Mon May 17, 2010 1:06 am    Post subject: Company Ownership Issue Reply with quote

Together with a friend, I developed a website design educational course in 2005. Employed officially by the school we both attended at the time, we produced lesson materials and delivered the course to students as employees of the school. After this was completed and our employment contracts ended, we decided to develop the course further as a business interest, selling directly to schools as an independent business.

And so, in 2008, we formed Simply Associates Limited, intended as a formal business arrangement between two friends. The ownership status comprised of us both being shareholders, owning one ordinary share apiece, and both being directors of the company.

We sold the course into a few schools, and whilst the resulting revenue wasn’t very high, we both had other commitments which were bigger than this, and thus, I don’t believe it achieved its potential, even in the climate of schools cutting down on unnecessary costs such as enrichment programmes.

Since that time, my then co-director stood down from his position in February of this year, and our friendship has also deteriorated to a state of non-repair. My option now is either to continue to run the company as-is, finding another director or someone to act as company secretary, or to dissolve the company.

However, I still see the company’s main asset, the educational course I developed alongside my co-director, as an asset worth holding onto, and something I would still like to pursue. The problem, as I see it, as that I don’t fully understand the state of ownership of it, the majority of which is purely intellectual property, aside from the written and electronic lesson materials which accompany it.

Where I seek advice is understanding what my options are now. I’d like to pursue the business of selling it further, but where possible, I’d like to do this with complete ownership. Is it a matter of buying the other shareholder’s share in Simply Associates, or if I were to dissolve the company, who owns the educational course and materials?

Thanks to anyone who can help in this matter!
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paul
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PostPosted: Mon May 17, 2010 9:44 am    Post subject: Re: Company Ownership Issue Reply with quote

Welcome to the forums. Please drop by the Introductions Forum and post there when you have chance.

As for your query, it sounds to me like it's one where you need professional advice rather than a few 'opinions' from a forum.

tehnath wrote:
Where I seek advice is understanding what my options are now. I’d like to pursue the business of selling it further, but where possible, I’d like to do this with complete ownership. Is it a matter of buying the other shareholder’s share in Simply Associates, or if I were to dissolve the company, who owns the educational course and materials?


This bit puzzled me slightly. You mention buying the other shareholder's share in the company, but you previously said he had stepped down. Is he still a Director and/or shareholder?
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tehnath
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PostPosted: Mon May 17, 2010 11:31 am    Post subject: Reply with quote

Thanks for your reply - he stepped down as director but remains a 50% shareholder.
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Smooth
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PostPosted: Mon May 17, 2010 1:45 pm    Post subject: Reply with quote

It would appear that the company owns the IP.

Any sale of the assets would a) require permission of the other shareholder (subject to your articles of association) and b) would need to be done in the company's name i.e. proceeds go into the company bank account.

If you then wish to dissolve the company you split the funds among the shareholders. If you can't reach agreement on these things with the other shareholder then get an arbiter or someone in. This is not something you can take unilateral decisions and actions on unless you want to run the risk of the other shareholder suing you.
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tehnath
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PostPosted: Fri May 21, 2010 7:16 pm    Post subject: Reply with quote

Thanks for the advice.

I have two questions:

As a director of the company, and given my position of wishing to continue running the course, would there not be a conflict of interest in ultimately selling it to myself?

Also, while I haven't discussed it with the oter shareholder, what would my position be of he then decided he didn't want to sell?

Thanks again!
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AdvertisingGuerrilla
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PostPosted: Tue Jun 08, 2010 6:16 pm    Post subject: Reply with quote

Hello Tehnath, I was once in such a sticky situation as you find yourself. I also thought my friendship with the other party was irreparable. After the problem was resolved we became friends again.

The worst thing you can do is take advice on your own, you need to work this out with your business partner. You are still partners until the business is sold or dissolved. Communication is key and you will find it easier than you think to work it out between you. You will stand to loose a considerable amount if you choose to legally resolve your problem.

If your business is based on personal relationships with your clients I would suggest you dissolve your initial company and establish your own new business. You will still be in contact with your clients, selling them the same service.

I will not comment on the legal aspects of your problem, or who owns what. I will say if you rewrite what you know, the new materials will be 100% yours.


If he stood down, why would he not want to get out of the company?
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deansimons77
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PostPosted: Sun Jul 24, 2011 5:35 pm    Post subject: Reply with quote

Way different from fractional ownership. I guess, that's better for the ones who are looking for nice resorts.





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chrisgayle
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PostPosted: Thu Aug 04, 2011 5:24 am    Post subject: Reply with quote

In modern Western popular culture some people believe that exclusive company ownership of property underlies much social injustice, and facilitates tyranny and oppression on an individual and societal scale. Others consider the striving to achieve greater ownership of wealth as the driving factor behind human technological advancement and increasing standards of living.
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AlbertSmith
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PostPosted: Mon Jan 16, 2012 12:11 pm    Post subject: Reply with quote

I agree with Smooth. And I agree with your reply.
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