Company Owner, Recriutment And Referrals

RidgeWalker

I thought I would post this to get some feedback and opinions.

Lets say for example a person owns a percentage of a company and benefits from their percentage of the profits each year. This person however only has a owns a small percentage say 15% of the company.

Recently this person drew several thousand more then what they are actually owed and now an argument ensues. The amount overpaid is easily proved and is really a mute point.

But now this owner decides to bring up that they recruited two sales people for the company and has given the sales people some referrals in the course of their other business which they run 100%.

Now this owner feels that they should be paid extra money for recruiting sales people and should be getting referral fees on top of that.

I have never heard of a company owner getting bonus's for recruiting sales people into a company that they are part owner in. The same goes for referral fees.

We can safely say that recruitment fees and referrals where not a part of the operating agreement for this owner so their is no contractual obligation for the company he is part owner of to pay him for recruiting or referrals.

To me this sounds greedy and a little bit delusional!

Discuss

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1mancrew

It sounds like the time has come to sever the relationship and let him go out on his own. You may also want to do an audit and make sure this is the only incident of giving himself a raise.

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KitchenSync

Not much to discuss, RW - I agree with you.

outlaw

I would end the business relationship with this person immediatly.

If he will not leave peacefully, then I would suggest hiring an attorney. ( or maybe a Philidelphia lawyer)

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SLSTech

If it's not in the partnership agreement, no way
Have the books audited to confirm it was just this one time
If at all possible buy them out minus the overpayment & sever said relationship, or offer repayment terms if the relationship can be healed & is in everyones best interest
Who are the salespeople loyal to, the Company or the 15% Owner? You might need to find a couple more

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RidgeWalker

People are loyal to their pocket books. There is no confidence in the other partners ability to run the business correctly. The books have been audited, that's how I found out he's over paid himself.

In my opinion their is no buy out because there was no investment capital risked at the time the partner ship was formed. He's made certain guarantees by providing his signature and ssn number. He's been paid for that, if the relationship ends there is no possibility that his input will relate to any future value or profits for the company. Hence no buy out in my opinion.

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TxElectrician

Then in the words of Texas' Governor "addios mofo"

Ed the Roofer

If he actually owns 15%, then there must be some sort of agreement.

Buy his 15% stake out.

Is there a pertner buy out agreement pre-written before the relationship was established?

Ed

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Double-A

"We can certainly put that on the agenda for the next board meeting and bring it up for a vote. I think that anything that befits the company is worth paying for. Please talk to Peggy and have her put that on the agenda."

I would then just carry on as usual. There is nothing to argue over. If its not in the articles of incorporation or in the partnership agreement, then there is nothing to discuss. I wouldn't end the partnership over something like this, but I would make it clear that changes horses in the middle of the stream, or making up compensation packages and/or fringe benefits on the fly is a big "No no".

Now, help me to understand how this person had enough control over the business's moneys to be able to remove more than his fair share of compensation? I call that theft.

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