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My business partner has recently resigned as a Director of my company but still has 1 share in the company. I also have 1 share in the company and I am now the only Director. I understand that if I take a dividend then I will have to pay him the same amount, how do I get round this without buying him out. He has stabbed me in the back and I want nothing more to do with him. I would appreciate any help.
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You need to get your head around the difference between being a shareholder and being a director - they aren't the same thing.
Shareholders own the business and, because you each have one share, he owns 50% of the net shareholders funds.
However you are the only Director, and Directors run a business. So, subject to the Articles of Association of the company, you may be able to operate by taking a (large enough) income as a director of the business such that you make a loss each year and gradually run down the net shareholders' assets (funds). The shareholders own the net assets and you are right that the business cannot declare a dividend without him being entitled to half of it. Of course paying yourself a larger salary instead of a dividend may not suit your own tax circumstances. That would be one way of extracting income from the business without it involving him. I hope you've tidied up the release of him as a director with Companies House.
You really need specialist help to find a way of releasing him as a shareholder. Without knowing the detail I can't help with that.
Shareholders own the business and, because you each have one share, he owns 50% of the net shareholders funds.
However you are the only Director, and Directors run a business. So, subject to the Articles of Association of the company, you may be able to operate by taking a (large enough) income as a director of the business such that you make a loss each year and gradually run down the net shareholders' assets (funds). The shareholders own the net assets and you are right that the business cannot declare a dividend without him being entitled to half of it. Of course paying yourself a larger salary instead of a dividend may not suit your own tax circumstances. That would be one way of extracting income from the business without it involving him. I hope you've tidied up the release of him as a director with Companies House.
You really need specialist help to find a way of releasing him as a shareholder. Without knowing the detail I can't help with that.
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