What can I do if 66% of the holders want to sell the business but the other 33% does not?
I'll try to make this short.
We were completely stupid not to prepare a partnership and operation agreement. Learn from our mistake!!
It's 3 partners, 2 of us hold 33.3% and the other one holds 33.4%. The 33.4% got greedy and now wants to buy both of us out. She wants to give us 15K each and we are not to contact the customers in 3 year. A true slap in the face when the company made 400K last year and 500K this year.
IF we don't want to sell, she will leave, take the customers, and any employee she wants. Plus we will have to pay the 20K debt we have with our vendors.
She feels she owns the customer because she brought them to the table. This was the original proposal; she gave us when she invited us to this business. She would bring the customers, I would handle all the admin, HR, Office, etc. The other 33.3 was to handle the shop.
We refuse to sell but if she takes the customers and the employees...she leaves us extremely weak. She did us wrong , used us for the capital, and credit. Now she wants to get rid of us....just not fair. We are considering selling the entire company to somebody else just so she doesn't take the customers or the employees. In the new sell agreement/contract, I want to stipulate that she cannot contact the customers or employees for a year, the previous owners will take over the 20k loan and we will also send a letter to all the customers that she is no longer with the company and can no longer contact them..... Can this be done and can we sell the business even if she doesn't want us to?
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Oct 20, 2020
There should be bylaws set by default otherwise, you won't be able to incorporate the company and to operate from the very beginning.
Better to check all your documents of inception and to consult with a trustworthy corporate lawyer.
Oct 19, 2020
I understand how you feel. I got voted out of my company on this same principle, which is why now I advise founders on how to protect themselves since the beginning to build the right foundation of their business.
To answer your question, the majority of the board and votes win. If the difference is 0.1% on stock, then I would check the board member seats. If there are any clauses in the voting rights on the incorporation of the board and company. Check those and always get a good lawyer.
thank you Angie. Unfortunately we have nothing written or documented. Stupid big mistake, I know. But I just want to sell the entire company with everything... machines, customers, and employees so she doesn't take them. She did us wrong and it was also our hard working sweat and tears that went into this company. Not fair that she wants to get away with this.