Business buy out advice

[raker]

Its a difficult one as its family, and you want to do the right thing.I dont know how big your company is, but i cant see how you can include projected earnings in a settlement and pay a wage to someone who doesnt work for the benefit of your firm indefinately.

If it was me, i`d look at equipment value and any short term projected earnings that have been booked in as it stands.Find a fifty fifty figure and offer that.

Life insurance should really cover sad and unexpected loss of a breadwinner.

 

 

Hope you sort it out, but you need proffessional advice.

[Peasgood]

First of all I must say I am really sorry to hear of your loss. I too lost a business partner and family member late last year so I know how you feel.

From what you have told us it sounds like you were in a partnership but without a written agreement. If this was the case then there are laws/rules that automatically kick in. One is the automatic dissolution of the partnership. I'm no expert ( especially as we were fortunate to have a very detailed agreement) but you can very easily use google to look up partnership law.

I would say you owe her nothing more than the value of any jointly owned assets. Ie. a shared van, saws, chipper etc. I can't see how she could possibly be entitled to any wage or share of profits whatsoever. If you feel obliged to help her out financially that is up to you but I would be extremely cautious of setting any agreement into writing.

Good luck, I hope you get through it.

 

As above, take professional and impartial advice. You will have to pay but it is money very well spent.

[gensetsteve]

I agree with peasgood. The good will of the company was with you and your brother. If you carry on you are the business. I would offer half the value of the assets. If you start a new business could you afford to pay someone a good wage to do nothing it will be hard enough paying for a climber if the recession is biting you. I feel for you after your recent loss now you have to deal with this. If you get on well with your sister in law I am sure you can talk it through and explain the situation if not start up again and offer to buy the tools.

[Marko]

I would offer half the value of the assets.

 

Half of net book value for the assets, pay per hour for any accountancy advice and look after that little girl as best you can.

[jaime bray]

Professional advice is the key, we can all provide opinion, but that is what most of us are able to do, and little more than that opinion.

 

I would imagine that your sister in laws survival mode has kicked in therefore causing her to suggest this offer. I would imagine that deep down she knows its good for her.

 

 

Contact citizens advice, they can be known to provide excellent advice FOC.

 

If it was me, I would just say, that you wish to run a business alone. Whether that be the current company trading name or a new trading name.

 

Make sure your accounts are up to date to enable a fair assessment of past and CURRENT trading status to be considered should it go that way.

 

I would not wish to go into business in this way from here on in. A working partnership is fine, as per that with your brother, but this one would be a noose around my neck, personally I think.

 

Add up the value of your equipment, you could either be generous and look at replacement cost, or alternatively look at the value within your accounts to assess the depreciated cost. As an accountant I would envisage the Sister in law would take the depreciated cost, as it will be much less.

 

Then consider whether the company name, phone number etc is worth anything or is it your face that is the value of customer loyalty etc.

 

Look at any contracts that are written up, or are they all as and when verbal agreements, that could be taken away at any minute. If the latter, then maybe they hold little value upon a commercial business valuation assessment being carried out by a specialist company.

 

If this was me, and this is a opinion of what I would do, not what you should deem fit. I would be looking to establish myself as a sole trader in arboriculture. Either by paying off the sister in law and getting it written up and acknowledged in writing professionally. Or set up again. Im guessing you have contact names and numbers of customers to hand at your home address, and they are not all at your brothers house. This may be seen as niggly, but you have said you have kids to, and maybe your 'survival mode' needs to kick in a tiny bit more for you to see what needs to happen for the benefit of your families future initially.

 

I would be open about how you feel, and simply say you do not wish to look into the possibility of the sister in law being involved in the firm, and wish to 'dissolve' the company, or buy her out as deemed appropriate by uk law.

 

Condolences on your loss. Good luck with it and hope work picks up soon.

 

P.s. Just googled business partnership buyouts, Loads on there relating to it. Have butchers.

Edited May 13, 2013 by jaime bray

[TGB]

Condolences on the loss of your brother and I hope it all works out for you and amicably so.

 

As others have said, you defiantly need to take professional impartial advice. And get any agreement in writing; what would happen, if anything were to happen to your sis-in-law. Would there then be a grand parent wanting a wage plus 50% of any profit.

 

Also as others have said, a split value on the hard assets of the company as is at the moment. Plus maybe a split on any profit made in this financial year up to the present time. But as you're now going to have to fork out for a climber; and having extra day-to-day running of the business, that may prevent you from working some of your manual hours. I fail to see how you can to all intents and purposes, support two families. You, your new climber and any subs will be doing the work. If the situation were different and it were not family, would you be ok to pay someone a wage and or 50% if any profits for doing not a lot.

 

Ok, so up till now you may have had the accounts do free of charge or at a discounted rate. But having to pay an accountant once a year, (Or if the business is big enough, having a full-time accountant.) to sort through receipts and submit tax returns is not going to be 50% of your profits plus a yearly wage.

 

If your brother were still alive and you had decided to leave the business. He would have had to get in someone to replace the lost worker, (and pay them). But would he have continued to pay you a wage and given you 50% of any profits, for doing nothing that wasn't already being being paid for? I think not…

Edited May 13, 2013 by TGB

[renewablejohn]

I lost my brother in law in a motor cycle accident just over a year ago. My sister has still not come to terms with it and needs all the moral support from family and friends just to keep going. The accident court case is still ongoing and until that is resolved I cannot see my sister achieving any sense of closure. Why the ramble well in your circumstances your sister in law will require your moral support to survive that is totally different to financial support which is a function of the accident and will be a claim against the other party involved in the accident if the other party was at fault. From your point of view you have lost an active partner and as such you will need to dissolve the partnership make a clean break and start over again. Any other course of action will inevitably lead to family friction in the long term. You will need professional help with the dissolution as your sister in law being an accountant will have an unfair advantage over you in respect of understanding of the law and may use it to her advantage.

[Stephen Blair]

A very emotional situation, you have all lost someone so special in your lives.

I think the original contract has finished, if you want to have a good relationship with her and your niece you must stop any business stuff with her.

Your assets value will be in your year end books, if you can pay it do so if not sell something to make it happen.

A simple sit down with a lawyer will solve this, if she has any issues, they might aswell be raised now.

Good luck:)

[dustydave]

Sorry for your loss.

 

 

I would get a detailed valuation of the ‘shared’ assets, terminate the business, pay her half the share, give her the details of previous customers etc. document and get everything witnessed. Then start up as a limited company under a totally different name. The potential for a future claim on the current business is always going to be a threat - and grief has strange ways of finding a focus. If you start again through a ltd and a new name - then you start with a totally new legal entity.

[DM TREES]

Sorry for your loss

Did your brother have life insurance ? Has this paid off their mortgage ?

If so I think she is after more than you ought to give

Buy your brothers tools assets off her

Then 50 % of the years profit in the year your brother passed away

I don't see how you owe her anymore than that

Set up a trust fund to take a percentage of the profit for the little girl

Seek legal advise

Tough times ahead chin up