11/09/2026
This is a very common and frustrating situation. 🥺.
✅️Legally, ownership of shares is completely separate from working for the company.
If someone owns 50% of the company's shares, they are legally entitled to 50% of any dividends distributed by the company, regardless of whether they work 80 hours a week or do nothing at all.
📌However, you have significant leverage over how profits are allocated before dividends are ever paid.
🛠️ What You Can Do (Your Options)
✅️1. Pay Yourself a Fair Market Salary First (Management Fees)As the person running the day-to-day operations, you are an employee/manager of the business, not just a shareholder.
Deduct a fair market-rate salary or management fee for your labor from the company’s revenue before calculating net profit.
Company profits (which dividends are paid from) only exist after all operational expenses—including your salary—are paid.
If your salary absorbs most of the income because you are doing all the work, there will be very little "net profit" left over to distribute as dividends to him.
📌2. Stop Declaring Dividends:
Dividends are not automatic. They must be formally declared by the board of directors.
If you are the sole director running operations, or if the two of you cannot agree to issue a dividend, the money stays in the company bank account as retained earnings to reinvest in growth.
He cannot legally force the company to pay a dividend just because he wants cash.
📌3. Propose a Share Buyout:
Since a 50-50 deadlock makes it impossible to outvote each other, the most viable long-term solution is often a buyout.
Offer to buy his 50% share of the company so you can own 100% of it. Base the evaluation on what the company is worth right now (which might be very little if it is new).
📌4. Draft a Shareholders' Agreement:
If he agrees to stay but wants to contribute, you must get a lawyer to draft a Shareholders' Agreement linking dividend payouts or share vesting to actual performance milestones.
📌5. Restructure or Start Fresh:
If your brother refuses a buyout and demands half the money for no work, you can stop putting your energy into this specific company.
You can wind down/liquidate this business.
Alternatively, you can step down from your operational role and register a completely new, separate entity where you own 100% of the shares.
You can then route your future sales, clients, and efforts into your new business.
✅️ Business and partnership matter no be for mouth oh. If you no wan dey work make another dey chop for free then put it into writing 📌.
