Meet Sue, she owns 20% of a company with her two partners – Peter and Thando. They started the business of buying and renting properties around 10 years ago.
At first, they purchased low cost properties infrequently. However, over time the company started to show a profit and their investments became increasingly significant. More expensive properties were purchased and often these were renovated and sold on. Some with a much larger return and others with no return at all.
Sue started to become uncomfortable with Peter and Thando’s approach around 4 years ago. She raised her concerns at various meetings and eventually things became acrimonious in the boardroom. That is when Peter and Thando removed Sue as a director.
Sue was absolutely distraught at her removal as a director so she decided to offer her shares, but neither Peter or Thando wanted to buy her out. So, now Sue is stuck and has no say in how her investment is being applied. She is now having to sue to secure and enforce her rights.
Unfortunately, many people face what Sue did, and that contributes to the astronomical rates of business failure. If Sue only used Contracts4Biz and PocketAdvisor, he would have made better choices and put together a Shareholders Agreement and MOI. This would have provided a roadmap outside of the Act to deal with this situation in a more effective and perhaps even a more private way. Both PocketAdvisor and Contracts4Biz provides people, like Sue, access to resources and contracts that would usually sell for thousands of rands. Click here to enrol today!