There are three partners in the business, it’s a digital media business. I work in the business full time, one partner is part time and the other works a full time job but helps out every now and then. I am wanting to put a shareholders agreement together but the others are assisting on equal share each. I am finding this difficult as I’m doing 80% of the work and generating the little revenue we have and it has become a bit of a disincentive to work harder as the rewards are not commensurate with the effort and contribution. How do I handle the predicament respectfully so everyone feels it has been handled appropriately and we can maximise the opportunity? Thank you

Hi Dale,

Unfortunately I don't think their is any right way of doing things in such situations, discussion with the partners is possibly the only way if you want to continue doing business together.

I reckon you need to ask them why they are insisting on equal share holding when you are the one doing 80% of work. Try and understand them first before making any effort to explain your side of things as that will hopefully give you direction as to how to handle the situation.

If their is any merit in having equal shareholding than possibly other angle with which you can approach would be to have some kind of regular salary for your work before the profits get distributed equally.

I would say that it is important that all parties concerned need to understand each others concern and address them in a correct fashion is essential and if this is not giving you an acceptable (if not desired) outcome than walking away from it now would be better off.

Hope this helps.

Best wishes.
Anuraag

Hi Dale,

I agree with Anuraag, you need to seperate ownership and reward.

You should each be paid a salary from the business based on your individual contribution to the day to day operations. If someone works part time or when they can their salary should reflect that.

Over and above what you each take as a salary, you can then have a separate discussion regarding the ownership.

Hope this helps.

Regards
James

G'Day Dale,

without trying to sound trite, the answer is to simply put in the same amount of hours as the other guys, and share in whatever shakes out of the tree.

This is very good example of why a clear written and signed partnership agreement is necessary. Saves on a bucketload of headaches......

as for what to do right now, I would stop any work and sit down with the other two to discuss the issues, thrash out a workable partnership agreement and see if you can get the business back on track.

You might find that the expectations of your business partners is such that you cant find a workable solution, and without an agreement as to how to manage differing contributions of labour and expertise, you are snookered. The standard division of partnership profit is equal shares. If the other guys dont agree to some sort of notional partners salary to compensate for your higher contribution of labour, then they have the right to demand an equal share

good luck
BC