Leaving business as shareholder - signing a non-compete??
Discussion
I am a 10% shareholder in a business and have always managed contractors/customers etc, basically the operational running of the business. I am leaving this behind, pulling put my stake and moving on.
My soon to be ex business partner (agreeable spilt I should point out) wants me to sign a 3 year non compete and although I don't have any intention of competing I don't want to have to sign one. As far as I understand I am under no obligation to sign one?
My soon to be ex business partner (agreeable spilt I should point out) wants me to sign a 3 year non compete and although I don't have any intention of competing I don't want to have to sign one. As far as I understand I am under no obligation to sign one?
JustinP1 said:
It sounds like you've come together in an amicable agreement on price etc, then the non-compete has been chucked in.
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That's exactly it. For all I know i could end up working for a competitor, its unlikely but I I don't want him telling me what I can and can't do. I'll 'charge' him for a non compete but he can't do anything about it if I say No I believe. its not part of our shareholder agreement. I can see he paranoid about me basically running the business currently and him just doing the admin/finances/marketing but that's his problem..
JustinP1 said:
Undirection said:
JustinP1 said:
It sounds like you've come together in an amicable agreement on price etc, then the non-compete has been chucked in.
.
That's exactly it. For all I know i could end up working for a competitor, its unlikely but I I don't want him telling me what I can and can't do. I'll 'charge' him for a non compete but he can't do anything about it if I say No I believe. its not part of our shareholder agreement. I can see he paranoid about me basically running the business currently and him just doing the admin/finances/marketing but that's his problem..
Ask him what he is hoping to achieve by the inclusion of a clause. The answer is of course "So you don't X, and so I can Y." that of course has an economic value to his benefit, and your detriment.
It may be that he's simply thrown it in as an afterthought and is not too precious about it, in which case he might drop it altogether. On the other hand, if he feels very strongly about it, then this clearly has an economic value to him which should end up being reflected in the negotiations and indeed the value of the agreement.
Just had 'the chat'. He is saying he won't give me my cash back unless I sign an NDA. He's worried I'll just start up in Jan (I won't but I could easily do this). I countered with the fact this was not what was agreed originally and that agreement did not state anything about an NDA. It got a bit awkward an then someone else came into the office. I need some legal advice I think...
Just getting my investment back directly. We had agreed that I could do this and so I am doing so. We have never said anything about a non compete and there is nothing in our agreement about it but he seems to be saying its a condition of getting the money back and it bloody isn't. He's trying to stop me starting up in competition and if he pisses me off enough I might just do that! (I won't but...)
Had a chat to Mrs UnD as she is used to managing a lot of business transactions and she said that I should just go with it. She said it's not worth falling out over something that is very unlikely to affect me anyway. I've known my business partner for 7-8 years and we've got on well. I put £10k in a year ago and I'll get £10k out, the business isn't worth much more than it was originally so I haven't really lost out. I may just cut it from 3yrs to 1yr but otherwise its not worth arguing over tbh.
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