Need advice leaving a start-up

4 posts in this topic

Posted

Hi All,

 

I've recently started a business with someone else, this person has majority equity of the company and is the vision behind the company. As of late, I feel I don't quite fit the tasks I was originally brought on to do, so I'd like to return my percentage back to the other founder. However I'm not sure how to do this, or what paper work would need to be filed.

 

Any advice would be greatly appreciated!

 

Edit: The company form is UG.

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Posted

What is the company form? GbR, GmbH, something else?

 

Your articles of association will detail the procedure for departing from or breaking up the partnership. Usually you need to write a letter within a specified time (often to the year-end) announcing your intention to depart. The articles of association will detail the procedure(s) that must then be followed or options for your departure. Options often include finding a replacement partner, forfeiture of some or all of your share, or the option for remaining partners to buy you out if they wish. Bear in mind that your departure will load additional costs on the partnership as accounts will need to be finalised to determine your current equity. It may be you have to pay these costs yourself. Again, this comes down to your original agreement.

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Posted

Thanks for replying York!

 

The company form is an UG (Unternehmergemeinschaft). Do you have any advice on where to begin to start the process for changing equity? I'm hoping it's a fairly painless process.

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Posted

Do you have the Articles of Association ("Gesellschaftsvertrag") that were used to create the UG in the first place? There must be one somewhere as you'd need a notorised copy to register the company in the Handelsregister. This is the bible of the company foundation, management an disolution and must detail how (or even if or when) you can depart or the circumstance under which the company can be broken up. It would be normal to simply sell your share, such as it is, with the other partner(s) having the first option to buy it, or a veto on who does. Estimating the value of your share to be able to do this is more complicated. You would also need a balance of accounts for the day you leave to calculate your residual value, or equity in the company, if it has already been trading. If any profit distribution so far has been unbalanced this may mean you have to pay additional money in (or receive money from other partners) to redress the balance. For this reason it is normal to prefer an exit at the year end, as the accounts will need to be completed to this point in any case, which saves having to prepare an extra-ordinary balance.

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