VIC Partner Used My Share - Company Directors Dispute?

[Tamarahere]

Hi, my question relates to a business entity l bought into almost 6 months ago. This was a start up business. I am a director in this company and own 40% share. My business partner is the other director also with 40% share, and the 20% share is held by a third party. Both myself and the other director have agreed to part ways and build our own independent businesses. However, l paid $20,000 for 40% share of the business. In 5 months, l have also generated sales/revenue for the company, created all the IP etc. In 5 months, my business partner has used approx $14,000+ dollars of the my investment. He did not contribute any funds to this business partnership. He wants to retain the existing business company and refuses to pay me the money he has extracted from the business -- which has facilitated his living expenses for the last 5-6 months.

I would incur further expenses and costs in creating a new separate business if he retains the existing business.

Both he and the silent partner are using bully tactics and threats on me, stating that they refuse to pay. I am extremely stressed and unclear if l have any legal standing in the matter as one of the company directors?
At this stage l have not proceeded with taking my directorship off legal documents, contracts or the bank account(s). I still have 40% share in the business. I feel my business partner should either pay me the money he has already extracted from my initial investment or find another person to buy me out. I'm hoping someone who know about contract law can advise me on my questions.
Thank you.

 

[Ivy]

Hi there,

Hopefully someone else will contribute here, however I can start you off. Firstly, if you are selling your share of the company, then the other two partners need to either pay you out or find another party to buy in. The actual amount that you should be paid is largely negotiable based not only on what you initially paid to buy into the company but on its current value. Part of the negotiation may include extra finances and information resources that you have injected, company revenue and profit, growth, inflation etcetera.

If you think your share of the company is worth more than what you paid for it, then it may be worth contacting a solicitor to among other things help you draft a letter of demand.