A few years ago my friend and his dad where setting up a business and needed someone to do the website and technical side of it.

I did this and in return got a share in the company (there are only 3). Now, I stopped having a lot to do with the company a while ago, and today I get a phone call from my friend saying that they werent going to carry on anymore, instead they were going to try some differnet ideas under the company name. He now wants me to sell my share back for like £20 cos they think its going to be weird me having a share in a company that I have nothing t o do with.

Now, do I sell the share back, or do I keep it and see what happens? If it makes money am I entitled to any of it?

Well thats not very much money, I would just hold on and see what happens.

Something like this happened to me years back, and I sold my share back as I wasn't contributing to the company anymore (and the company wasn't going anywhere or making any real money), they are friends.

They could have always formed another company without me (under a different name). It was just more friendly to go with getting bought out and keeping a good relationship.

I would say just take the money and have a couple drinks.

For 20 squid I am not sure. Is that how much the company is worth times 3?

It just depends on how it all ends. Might be worth seeing what their next venture is.

Take what the company is worth in tangible and intangible assets, divide by three, that is what your share is worth. If in doubt ask to see the accounts for the preceeding financial year to assess the net worth of the company.

There are limits to friendships but its only fair you get one third of the current real value of the company.

I guess it would depend on the percentage of share(s) that he has in the company. Is it 3 equal? or 40/40/20? or something like that?

I do think richy has a point though and it would be unfair if you didnt get your fair share back.

shares are all equal in this sense. There were 3 shares allocated, all have an equal worth. You just vary the amount of shares issued if you want to give people different amounts.q

The point of owning a share in a company is that you offered something to them (be it money, a service, whatever), as investment per se. Investments are made to produce a profit later on. Do you value your web design at £20?

He cannot force you to sell your share, if I were you, I would hold on, there's nothing worse then selling it for 20 bucks now and the company becomes a multi-million dollar establishment later on.

Hmmm.......think i'll just say £50 for the design of it all, call it quits.
Hadnt really thought about them just starting a differnet company name!

No point falling out over money eh!

non whatsoever unless they become the next microsoft then your 1 share woul be worth billions.

Originally posted by phill2003
non whatsoever unless they become the next microsoft then your 1 share woul be worth billions.

Don't know what market you're looking at... but 1 share of Microsoft is worth roughly $25 today...

Originally posted by twstdroot
Don't know what market you're looking at... but 1 share of Microsoft is worth roughly $25 today...
But there is only 3 shares in this company!

well what would your friend do if he was in your position?
if it was me though, id keep the share, rather have the share than £20,

Here are the points I picked up on:

1) A few years ago
2) they werent going to carry on anymore (I'm guessing not making any money)
3) try some differnet ideas (basicially a new venture)
4) under the company name

Looks like a failed venture and all they want is to keep the name under the new venture. I see no value trying to hold on to something like this. Plus with the new venture I am guessing the work BennyP had done wouldn't (for the most part) be able to be used. Why would his friend want to give away a third of this (mostly) new company to a partner who didn't have any work in it? All you talking about the next Microsoft are kidding yourselves.

I would counter with 50, just citing all the work he had put into it (but, by taking stock instead of cash he was also taking a risk if the business failed(?) and maybe he can have a nice night out or something).

Like I said, I don't think the unlikely possibiliy of profit is worth hanging on to the stock (remember they could alway form another corporation and not be happy with Benny) vs friendships. Who knows, if the new venture works out they will remember Benny in a good light.

Technically (I'm not sure how UK companies work) you should 'own' apart of their company and have say in what happens. They still own two thirds of the company and they would have the majority vote. As others have previously said you do not have to sell it back. (20 GBP is quite good for one share of stock considering most stock is not valued as much) It should really be up to you and how your friendship is with them. We don't know anything about you or your friend and his dad.

Originally posted by twstdroot
Don't know what market you're looking at... but 1 share of Microsoft is worth roughly $25 today...
If you owned 1 of 3 shares you would own 1/3 of Microsoft...which would be billions.