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  1. #1
    Join Date
    Aug 2004
    Location
    Home East Lancashire boat Spain
    Posts
    4,673

    Default Removing a boat group shareholder.

    Our group comprises 6 members.
    Everbody seems to get on fine but I am considering what we would do if problems develop with a member.
    A scenerio could be a member who continually leaves the boat in a poor condition, causes excessive wear and tear etc.
    There is no mechanism for dealing with this in our agreement.
    Various sample formats I have looked at dont seem to cover this.
    Has anyone, either, experienced this sort of problem or can recommend a form of words which will cover it?

  2. #2
    Join Date
    Dec 2001
    Location
    Grenoble
    Posts
    31,760

    Default Re: Removing a boat group shareholder.

    Include a clause that requires 5 of the 6 members to exclude the remaining one by buying him out, all 5 members to be in agreement and of course all 6 members need to be in agreement prior to instituting the clause.

  3. #3
    Join Date
    Apr 2013
    Posts
    6,922

    Default Re: Removing a boat group shareholder.

    Quote Originally Posted by Fr J Hackett View Post
    Include a clause that requires 5 of the 6 members to exclude the remaining one by buying him out. ...
    And including a mechanism to establish a fair buy-out price, in case of dispute?

  4. #4
    Join Date
    Nov 2013
    Location
    Perth WA
    Posts
    2,183

    Default Re: Removing a boat group shareholder.

    I think it is pretty dangerous to get a legal opinion of a group of people like us.

    I used to teach Partnership Law quite some time ago and I know there is an Australian Partnership Act and just now I confirmed there is a UK Partnership Act so any Partnership Agreement you come up with will have to comply with that.
    I suggest you search:
    • Dissolution of Partnerships
    • Dissolution of Partnership clauses
    • Sample Partnership Agreements
    Last edited by coopec; 19-07-19 at 11:47.

  5. #5
    Join Date
    Jan 2012
    Location
    South Coast
    Posts
    5,196

    Default Re: Removing a boat group shareholder.

    So is a problem is already manifest then ? This is the sort of question any serious joiner of a group ownership should have already asked and understood the answer before signing up, as indeed it could apply to him as the subject of concern later.
    Interested in Corvettes PM me for details of the Corvette Motorboat Association

  6. #6
    Join Date
    Nov 2007
    Location
    Boat Orwell - Me Norwich
    Posts
    8,231

    Default Re: Removing a boat group shareholder.

    Presumably a majority decision could be made to dissolve the partnership of six, and a new partnership of five could agree to buy the boat off of the original partnership. (In practice, once the proposal was on the table the 'problem' one member might well take the hint and bow out on mutually agreeable terms before it came to that, though it is true there are some bloody difficult people about.) The new partnership could subsequently decide to expand to include a new sixth member, if they wished.

    Reminds me of a friend who jointly owned a big catamaran with one other person. The deal was they each had a hull each (two cabins and a heads/shower each hull). They could each leave their own hull however clean/(un)tidy/dirty they liked. There was a striking difference between them. The other party could use the other partners hull (for friends etc.), but had to accept it as it was and leave it as they found it.

  7. #7
    Join Date
    Nov 2013
    Location
    Perth WA
    Posts
    2,183

    Default Re: Removing a boat group shareholder.

    The procedure to expel a partner would have to be spelled out in the Partnership Agreement because:

    Partnership Act 1890 - Wikipedia
    https://en.wikipedia.org/wiki/Partnership_Act_1890

    Jump to Liability of partners - Main provisions Each partner is entitled to participate in management, get an equal share of profit, an indemnity in respect of liabilities assumed in the course of business and the right to not be expelled by other partners. A partnership ends on the death of a partner, unless an agreement is made prior to the deaths.

  8. #8
    Join Date
    Oct 2012
    Location
    Southminster, essex
    Posts
    9,436

    Default Re: Removing a boat group shareholder.

    Reminds me of the " Nick B" thread we had some years ago.
    It is all down to the fact that my wife does not understand me !!

  9. #9
    Join Date
    May 2007
    Posts
    38,235

    Default Re: Removing a boat group shareholder.

    Some friends of mine jointly campaign a small racing boat , where the money is more about yearly expenses than capital.
    Their approach is that they agree to commit to a season at a time.
    People come and go from one season to the next.

    So maybe for a cruising boat, a time limited partnership which plans to be dissolved after say 5 years might work?

    I have heard of all sorts of sharing arrangements working or not working, I think there is no right answer which suits everyone.
    But I feel there always needs to be an agreed exit strategy.

  10. #10
    Join Date
    Dec 2010
    Location
    South Oxfordshire, Gosport and Wellington New Zealand.
    Posts
    8,223

    Default Re: Removing a boat group shareholder.

    Our first sailing boat was a third share. It was a tidy 22 year old cruiser racer. The owner was struggling with the fixed costs-mooring and annual haulout, so he sold two shares. IIRC, an RYA agreement was used.

    He though that as he was the owner initialy this confered the maintenance to the other shareholders-and the costs!

    I soon put him right. The other partner was not quite so up front as me. He was quite shocked when I asked " Are you going to pay your fair whack and do the graft, or what?

    This cleared the air for a bit, but things slipped back after a couple of seasons.

    We sold out to another partner. I warned him about the bad guy.

    I made it clear to him that " Getting money for the share of the costs is like trying to poke butter up a Porcupine's arse with a red hot knitting needle! "

    After the money was in my bank, of course.............................

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