Problems Without Business Protection Plan
Ask yourself:-
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If a co-owner dies today, can you work with his family to run the business?
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Will the co-owner’s family members know how to run the business with you?
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Can they work well with you?
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Would your beneficiaries be able to get a fair price?
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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?
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Can the shares/interests you are purchasing be transferred quickly to you?
Often these are:-
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A new partnership is created due to the inheritance of the shares/interest by inexperienced heirs. Chances are this new partnership may fail.
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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.
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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.
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It is possible that the co-owners may decide to abandon the business and start their own due to disputes with the heirs.
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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.