Client Owes Money/Company Shares

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  1. #1

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    Client Owes Money/Company Shares

    As a quick background. A client (I work as a freelancer) hired me with an agreement signed that I would be paid in shares within the start-up company or in cash (my choice at the end of the project). I have worked with this person in 'a previous life' but in this context he is now CEO for a start-up IT application/software firm.

    Anyway, I have invoiced for $4,000-odd and said that I would like to be paid in cash (thank goodness that it is not more than this as it was originally a $32,000 program).

    Anyway he says he has no cash. The company is still going and changing.

    How can I get my money? I don't want to take him to small claims but want to push him to either pay up or formally give me these 'shares' that he doesn't have yet as the company has not listed and it looks like it isn't going to. They are now expanding overseas.

    I never should have gone down the 'share' path as I just don't know enough about how it works!

    Any thoughts/advice appreciated.

    Last edited by 0ze_Kid; 12-06-2009 at 01:32 PM.

  2. #2

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    What legal entity do you have the contract with? Just the person?

    A company doesn't have to be listed to have shares - all registered limited companies must have them (the vast majority of companies are not listed).


  3. #3

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    Your options for recourse will depend on the terms of the contract. Could you provide more details about it?

    I'm surprised that a company that is expanding internationally can't afford to pay their freelance staff $600 though (whether it's HKD, USD, AUD etc.)


  4. #4

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    >> Anyway he says he has no cash.

    Liar, Liar, Pants on Fire .....

    They have no right to be in business and not pay such small amounts.

    Don't bother with the shares thing.. its just a scam. NO and I mean NO business owner who is supremely confident of his product would exchange shares for sweat. It just leads to major complications down the road if they're going to be looking for external financing.... in my opinion.


  5. #5

    take the money not the shares.
    If you take the shares, it also means you are liable for the share of the debt as well.Since this company is not willing to pay you, then it is most likely to go under anyway.

    Take it to the small claims tribunal in wanchai. VERY VERY simple. Fill in the form, pay your $50 and you are done. I have done it and got back $12,000. When people appear in front of a judge in a court, they go weak.

    Also, when you file your form, it is exactly one month later for you to appear in court. It is a very very simple process. No need to include lawyers.


  6. #6

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    Thanks so much. He originally said he would pay by 1 July but we are on the 10th and still nothing! Going to send him a reminder and then get in contact with my cousin who is a lawyer and debt collector. Maybe he can write a letter to him that looks like I will take him to small claims court!


  7. #7

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    I'd bet you a tenner that as soon as he got the court date from the small claims court he'd find you that money pdq.


  8. #8

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    Quote Originally Posted by Load Toad:
    I'd bet you a tenner that as soon as he got the court date from the small claims court he'd find you that money pdq.
    Yes, that's what usually happens.