Business buy out advice

[jose]

Hi all.

I very recently lost my brother and business partner In an motorcycle accident.

Been a happy lucky going guy we never had anything in writing about if something should happen to one of us. We were so close that everything we did was 50 50 and work and finances etc were always fair without a shadow of doubt.

 

Since he passed away without any will or partner ship directions his half of the company goes to his wife.

 

Now i get alone well with her but I worry that I don't have the knowledge required to ensure that we both come out of this situation fairly. She is an accountant and tbh can baffle me with the lingo and her knowledge.

She has suggested that the company pay her a monthly wage and also 50% of the annual net profit.

She would not have a role in the day to day running apart from the odd hand to advise me on data input.

 

I am thinking it would be better to buy her out of her half of the company.

I am after advise on what's the best way to work out things like how to value the company etc.

I am not looking to cheat or hide anything because she is family, my brother left a 8yr old, my niece whom I will do my best to help raise.

I just want to be informed as I too have a wife and 2 kids and don't want anything stupid to ruin their relation ships with their aunt or cousin.

 

All and any advice greatly appreciated!

[Pete Mctree]

I would get some professional & impartial advice. Then, when you have a range of options decide, because 50% for nothing is alot, however she is due her fair share

[treequip]

Hi all.

I very recently lost my brother and business partner In an motorcycle accident.

Been a happy lucky going guy we never had anything in writing about if something should happen to one of us. We were so close that everything we did was 50 50 and work and finances etc were always fair without a shadow of doubt.

 

Since he passed away without any will or partner ship directions his half of the company goes to his wife.

 

Now i get alone well with her but I worry that I don't have the knowledge required to ensure that we both come out of this situation fairly. She is an accountant and tbh can baffle me with the lingo and her knowledge.

She has suggested that the company pay her a monthly wage and also 50% of the annual net profit.

She would not have a role in the day to day running apart from the odd hand to advise me on data input.

 

I am thinking it would be better to buy her out of her half of the company.

I am after advise on what's the best way to work out things like how to value the company etc.

I am not looking to cheat or hide anything because she is family, my brother left a 8yr old, my niece whom I will do my best to help raise.

I just want to be informed as I too have a wife and 2 kids and don't want anything stupid to ruin their relation ships with their aunt or cousin.

 

All and any advice greatly appreciated!

 

She wants a wage for doing next to nothing, that wage should be next to nothing, she wants half the profits for doing nothing, not a prayer. She has inhered half the value of the company as it stands

 

Offer her that as a buy out

[skyhuck]

I would get three different specialist business valuers to value the business and take the middle price as fair.

[WorcsWuss]

This is an awkward one.

Unless your sister in law actually takes on a productive role within the business I don't see how she can take a wage.

Assuming it is a limited company then her 50% of the shares can pay a dividend if a profit is made.

However, based on what it seems she has initially suggested, not only have you lost someone clearly very dear to you, but you will be financially much worse off if you agree to it.

If it's not a limited company then there is no company per se.

 

With the best will in the world it feels like you're about to get shafted.

You need to take some proper advice on this.

[jose]

Definately need to get advice.

We are not a limited company.

Not only did I lose my brother I also lost a lead climber who also did a solid 50% of the quotations , admin etc!

 

A major concern is that the recession seems to caught us up this yr, out earnings have dropped well over 50% (not our fauly really the company we subbed for lost their contract so we did by association).

So where we did good last yr, we are down a lot but will the company be valued on last yrs takings? If so I am screwed!

[Kev Stephenson]

50% of any profit would be fair as she owns 50% of the company but not a wage. I assume if you wish to continue running the company as it was you will need to employ someone to do the work your brother did. This is the person that gets the wage.

 

As has been stated this assumes there is a company and not just a collection of tools/plant/customers you and your brother co-owned.

[mad matty]

whatever happen's good luck...and sorry for you loss.

[rovers90]

It does sound as thought she is asking for a lot for not a lot of input. Whilst I would have thought valuers would base their figures on your past years performances I am sure they would make some adjustment/comment on the downturn in your current years figures.

 

Probably not what you want to be thinking about but if you've got wife and two kids have you reviewed your life and income protection recently?

[treequip]

Definately need to get advice.

We are not a limited company.

Not only did I lose my brother I also lost a lead climber who also did a solid 50% of the quotations , admin etc!

 

A major concern is that the recession seems to caught us up this yr, out earnings have dropped well over 50% (not our fauly really the company we subbed for lost their contract so we did by association).

So where we did good last yr, we are down a lot but will the company be valued on last yrs takings? If so I am screwed!

 

Should have said this sooner but condolences on your loss

 

Not really screwed, offer the buy out on projected earnings, take it or take the wage, but fill the empty boots to get it. It sounds a bit harsh in the circumstances but you have to look after yourself