My husband went into business with a gentleman who seemed to be very clued up (he's an accountant). He has numerous other businesses and was able to open doors that we would never have had access to in order to start up our business.
On his suggestion my husband became Company Director while he took the role of Company Secretary. The business needed a capital injection in order to get it up and running which he estimated/forecast at £45k. He is well connected and managed to secure a loan for this amount.
For seven weeks my husband was alone in overseeing the refurbishment (it was a pub opening) and opening of the bar, something he had never done before. He worked for 7 weeks on this, doing 14-17 hour days, 7 days a week and never took a penny for the work. He kept the 'partner' up-to-date on spend every day. Some of the purchases (£13k) were paid for direct from our savings which we fully expected to be matched by the partner in order to have cashflow now open. We went slightly over the spend budget but not on anything that was not needed (builders extra costs due to bad weather etc).
After asking the partner how he wanted to proceed with regards to his input into the company and fears over cashflow he has replied that he is not liable to pay anything in (he paid the builder £10k but took the money straight back from the loan company into his own account without it hitting the company account). He said, if there is a cash flow problem, that is our problem not his, that he would expect us to input a further £25k at least to keep it afloat.
He outlined his brief that he has done his part of the job (premises location, bank set-up, finding company to loan money etc) and for this he expected no input from him PLUS 50% share into the company. This would mean that we would be placing over £35,000 of our own money into the company with no debt to him and that he would still retain 50% of any profit - this was never outlined to us until after the fact. This seems totally unfair.
We are new to this and probably too trusting, but we just need to know where we stand. We cannot afford to fund this whole business on our own and will probably have to walk away. My husband thinks that this was always his plan, as he is well placed with the company that loaned the money AND the person who sold the lease. My husband thinks that he is hoping we will walk after setting everything up, getting the place up and running and spending all our money. He can then just walk into it (he has the money) with no input at all and take it from there...
I hope someone can help us.. We are going to seek legal advice of course but this is our first step...