NSW No Contract - How to Prove Business Ownership?

[dan jones]

Hi, I started a business with 2 other individuals over 15 years ago. I am wanting to leave the business. However, I do not have any formal documents (like a contract or company registration information) to prove the fact that I was one of the founders of the business.

How can I prove that I am entitled to 1/3 share of the business under commercial law?
Thanks.

 

[Rod]

You need to better define 'business'. What is the legal structure of your business?

 

[dan jones]

pty ltd, however, i have since discovered that my 2 partners have created trusts under there own names that are the legal entity of the business

 

[Rod]

Do you mean that their trusts are shareholders? You should be a shareholder as well, albeit in your own name. Their trusts as shareholders should not be relevant to you.

ASIC will have the records of shareholders and you can order these documents online. The shareholding determines ownership. If the shareholding split doesn't match what you believe, then get the documents from ASIC that shows changes in shareholding. Not sure though how far back in time you can go for the online records lodged with ASIC.

 

[dan jones]

basically, i trusted 1 person that when we sold the business it would be split 3 ways. unfortunately i have been naive and dont have any paperwork. the 2 other partners have been drawing a significant amount of money from the business without my knowledge, and i have only come across proof of this recently when i saw a copy of a yearly personal income tax assessment.

 

[Rod]

Will that 'trusted person' support you now, knowing that you want to sell? If not, then I don't like you chances unless you have something in writing. ASIC is the official record holder of ownership and am I sorry to say that unless you can prove otherwise, it is not looking good for you.

 

[John R]

Hi @dan jones

1. Following on from @Rod's comments, you may consider obtaining an ASIC "Current and historical company information" company extract from ASIC Connect for $19 to confirm whether you are (or have been) a director, secretary or shareholder in the company.
2. Have you discussed the matter with your purported business partner/s? If yes, what have they said?

Hope this helps. Please keep us updated with your progress.