“I need to find an exit for my shares when I am not around.”
A well-constructed plan is essential to protect the value of the business and provide cash for the family in the event there is a major disruption in the business due to a co-owner’s death, disability, retirement or serious major illness or any other event that jeopardizes the continuity of the business.
Ask yourself :
✅ If a co-owner dies today, can you work with his family to run the business?
✅ Will the co-owner’s family members know how to run the business with you?
✅ Can they work well with you?
✅ Would your beneficiaries be able to get a fair price?
✅ Do you have the funds to buy out the co-owner’s shares/interests from the family members when there is no pre-agreed price in a written agreement?
✅ Can the shares/interests you are purchasing be transferred quickly to you?
Problems Without Business Protection Plan
Often these are:-
- A new partnership is created due to the inheritance of the shares/interest by inexperienced heirs. Chances are this new partnership may fail.
- There is no pre-agreed price for any sale to take place when the heirs decide to sell to the other co-owners. As a result, it may take years to settle a transaction price.
- Some of the unqualified heirs may insist on being directors of the company and be active in running the business. This may lead to serious disruptions and disputes within management.
- It is possible that the co-owners may decide to abandon the business and start their own due to disputes with the heirs.
- Loss of profits and uncertainty about the business future success.
- After all your hard work in building your business, you need to avoid such problems.
After all your hard work in building your business, you need to avoid such problems.