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Salesman guilty of gross misconduct


Lawson-West Solicitors - Expert Author

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Published 30th January 2014

Some years ago, our client set up a web design business in Canary Wharf with two partners, one in a technical role and the other a salesman.

Following the breakdown of one relationship, the salesman announced that he was going travelling with his new girlfriend for several months. In addition to being an employee of the business, the salesman was also a company director and a shareholder, owning 33% of the shares. 

A few weeks after the salesman left to go travelling, our client received an email from one of their customers asking if they had started work on his project as yet. The customer had paid a deposit but there was no record of this. It turned out that the salesman had said there was a problem with the companyís bank account and the deposit should be paid to him personally.

Our client clearly wants redress for his partnerís gross misconduct.  In this case we need to deal with all three positions that the salesman holds, firstly by removing his role as a director of the company. As an employee, the salesman will still have rights pursuant to employment law and will need to be dealt with according to a set disciplinary procedure before his employment can be terminated. Finally we will need to deal with the shares while considering the risk of prejudicing a minority shareholder.

A shareholder agreement made at the outset of a business partnership could protect the other shareholders in problematic situations such as this one and enable them to claim back shares if there has been a breach of the agreement.

For more information on disputes between shareholders and partners, please contact Tom Jellicoe

About the Author

Lawson-West specialise in commercial, business and employment law. Our team of dedicated commercial solicitors can help with buying or selling a business, business law and disputes, landlord and tenant issues and commercial property. Our expert employment team can offer practical advice and guidance on all aspects of employment law including redundancy, compromise agreements and dismissal procedures. Visit for more information.

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Article Published/Sorted/Amended on Scopulus 2014-02-13 09:39:13 in Legal Articles

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