Hello,
I am interested in what can be done for a potential company partner who suffers from mental health issues. The company has not yet been registered, and there are discussions ongoing about how the company should be split. Ideally, the partner with the mental health issues should have a 51% share of the company. However, he/she, as mentioned, suffers from mental health issues, and the concern is what may happen during one of these "episodes". During such an episode, the partner is prone to giving money away, and the fear is that once the company is registered, that shares may be given away, or terrible decisions be made on behalf of the company.
With this in mind, what protections can possibly be put in place to prevent catastrophic scenarios? These mental health episodes can last for months if untreated, although they are usually treated and resolved within 2 months. They are irregular, occurring once every few years.
One suggestion is that the share spilt for the person in question should be 49% or less. Is this the only way forward? Or is there a way for the person to retain a 51% share, and for the business to be protected? (The business is being split between three people)
Thank for your time, and hope that you can help.
I am interested in what can be done for a potential company partner who suffers from mental health issues. The company has not yet been registered, and there are discussions ongoing about how the company should be split. Ideally, the partner with the mental health issues should have a 51% share of the company. However, he/she, as mentioned, suffers from mental health issues, and the concern is what may happen during one of these "episodes". During such an episode, the partner is prone to giving money away, and the fear is that once the company is registered, that shares may be given away, or terrible decisions be made on behalf of the company.
With this in mind, what protections can possibly be put in place to prevent catastrophic scenarios? These mental health episodes can last for months if untreated, although they are usually treated and resolved within 2 months. They are irregular, occurring once every few years.
One suggestion is that the share spilt for the person in question should be 49% or less. Is this the only way forward? Or is there a way for the person to retain a 51% share, and for the business to be protected? (The business is being split between three people)
Thank for your time, and hope that you can help.
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