Ltd. Company Splitting, Directors going separate ways

Hi, I've never posted here before so hello. I'm having a problem and I need some advice if any of you can help.
The story is that my fiance is in business with this guy, they started it up 1 year ago. From the start, the partner (lets call him Joe) was very troublesome, he's hard work at the best of times, but he was being really difficult.
Now a year on, Joe has let him down so many times and I've ended up going in and finishing jobs where he has walked off. He's so unreliable and difficult.Joe's side of the business is bringing in no money whatsoever, and the guy is actually cancelling jobs because he knows my boyfriend is working enough for the both of them!!
Its just gone out of control at this stage, Joe has completely cleaned out the account between buying tools and claiming expenses.
After months of me arguing my boyfriend (who is really quiet) on the request of his accountant has decided to split away from him, at first he didn't want to ruin the friendship but now he is so stressed out he just doesn't care.

The problem now is that my boyfriend is insisting on keeping the company name and getting your man to sign over his shares to him. I am sick with worry at this proposal, because as soon as he starts doing well, I have a gut feeling that Joe will try to sue him for money since he was one of the founder members of the company. Leaving all that aside, the guy is totally unreasonable and I feel he's not going to just sign everything over like that without causing major trouble over the coming months. Plus he could start running up debts and God knows what in the interim.

My advice to my boyfriend is for him is to resign from the company immediately, cut his losses and start up a new company, as quickly as possible, completely by himself.
I'm finding it so hard to convince him to do this, what am I going to do?
His argument is that it could take months to sort out vat numbers and bank accounts and he needs to continue working.
Sorry for going on so long, I just don't understand how someone wouldn't want to move on and start afresh away from this liability of a man...... so I'm going to show him this thread and hopefully convince him to dissolve the whole thing and walk away free.

And I just wanted to say that the reason I'm so concerned is that we are getting married next year, therefore the house will then be in both our names and not just mine, and I don't want to be in a situation where I have ANYTHING to do with this guy, financially

Firstly if its a limited company, and your boyfriend has NOT provided a personal guarantee for any loans/commitments you need not worry about your home. A limited company = limited liability. This means that the directors personal assets (house, car, cash in bank, etc) cannot be demanded as payment for bills/debts/liabilites incurred by the company. So don't worry on that front.

Personally, I would think your boyfriend would be best to walk away from this company and start a new company - he can call the new company XXX Ltd t/a (trading as) "Old Company name" - if he's worried about losing exisiting customers or feels he has worked hard to build the good name of his current co.

Lorz said:

Personally, I would think your boyfriend would be best to walk away from this company and start a new company - he can call the new company XXX Ltd t/a (trading as) "Old Company name" - if he's worried about losing exisiting customers or feels he has worked hard to build the good name of his current co.

Click to expand...

He won't be able to use the old company name without permission of the old company which kind of goes back to square one again.

A limited company = limited liability. This means that the directors personal assets (house, car, cash in bank, etc) cannot be demanded as payment for bills/debts/liabilites incurred by the company.

Click to expand...

This isn't necessarily correct, depending on circumstances, but the Family Home Protection Act provides some safeguards against the family home being put at risk in this way

Personally, I would think your boyfriend would be best to walk away from this company and start a new company

Click to expand...

unless he is very careful about how he does this, this option could get very messy. best to get proper professional advice in advance.

ubiquitous said:

This isn't necessarily correct, depending on circumstances, but the Family Home Protection Act provides some safeguards against the family home being put at risk in this way

Click to expand...

What circumstances aside from providing a personal guarantee?

Lorz said:

What circumstances aside from providing a personal guarantee?

Click to expand...

Reckless trading (e.g. trading while insolvent) is one example. Even without deliberately trying to defraud people it is quite possible to do due to either

a) insufficient detail or lack of timeliness in preparing the accounting records resulting in not realising until its too late
b) not accepting the reality of how bad things have got even with the information available and trying in good faith to trade their way out of it

Thanks for clarifying that!