Very complicated situation, help maybe?

[MacDougall]

Okay i have no idea if anyone on here would even remotely know the answer to this, and i dont want to ask a lawyer but may have too. so My family has a buisness, two family member had joint owner ship, 50/50. one family member left the company and got a job else wear, but still owns 50% of the shares in the company. they can not come up on an agreed amount, to buy the one that left, out of the company. i now have an oppurtunity to buy the 50% of shares that the one left left has. but the person that is still here would never agree on giving me any say in anything about the company. now the questions is does he have to agree, or does me owning 50% of the shares give me 50% of the say in the company?

If that doesnt make since i can try to explain it better. it gets more complicated then that with a few things but that is my main question.

[SuperCrutyPS]

Getting or consulting a lawyer that specializes in Corporate Law may be the best way to know for sure.

[MacDougall]

Originally Posted by SuperCrutyPS

Getting or consulting a lawyer that specializes in Corporate Law may be the best way to know for sure.

I thought so too but figured i would see if anyone here knew first

[Bad Night]

I do know that being 50/50 partners means neither of you has more say than the other . Why would you even want to buy into a company knowing full well you would be at odds with your new partner right off the rip . That would suck .

[kingranch89]

yea sounds like that situation is never going to work out i would avoid if i was you

[MacDougall]

The situation would be fine once in, but if had a choice the other party would rather stay alone due to the money. but once in they would have no choice but to work along side because he HAS to have this job and HAS to have this job work. therefore once in it would be fine, its just getting there. its a very complicated situation.

[Alberta Advantage]

How are you getting 50% of the company if owner 1 and owner 2 can't come to terms on an agreed valuation of the company. Are you just going to buy in for some arbitrary number that makes the owner of the shares that left happy? You could be severely overpaying if the seller is selling at a price he values the company and not the true book value of the company. 50/50 means you both have say in what the company does. If the owner that's staying doesn't want you as a 50/50 partner, I'd sell him your shares once you purchase them. Maybe, sell him an additional 20% so he has 70% and you have 30%. Then, you'd recoup some cost of buying the business at an inflated price from the partner that left so you aren't putting up 100% of the valuation that the owner has. Flip side is you'd only see 30% of the profit.

[MacDougall]

Originally Posted by Alberta Advantage

How are you getting 50% of the company if owner 1 and owner 2 can't come to terms on an agreed valuation of the company. Are you just going to buy in for some arbitrary number that makes the owner of the shares that left happy? You could be severely overpaying if the seller is selling at a price he values the company and not the true book value of the company. 50/50 means you both have say in what the company does. If the owner that's staying doesn't want you as a 50/50 partner, I'd sell him your shares once you purchase them. Maybe, sell him an additional 20% so he has 70% and you have 30%. Then, you'd recoup some cost of buying the business at an inflated price from the partner that left so you aren't putting up 100% of the valuation that the owner has. Flip side is you'd only see 30% of the profit.

The owner that left is wanting 50% of the value that it was appraised at when he left, which was about 100,000 more then it is appraised at now, and owner that is there wants to pay 50% of what its worth now. the owner that left doesnt like and never has like the owner that is still there. But the owner that left and i have always had a good relationship and i can purchase his 50% for WAY less then it is appraised. And i dont want to give the owner there now more then 50% because, he has been making the company break even every month so the company is showing no profit. that way the owner that left doesnt get 50% of the profit, and i think he would do the same to me if he had more then 50%.

[Evil Eye]

50% is an arbitrary term in this case since you are basing it ONLY on the valuation of the appraisal. 50% ownership reflects the amount of ownership stake in the company including ALL assets and liabilities. But what about intellectual property rights? Land or mineral rights? Process technology or other proprietary ways of either processing or refining a product? You are grossly simplifying some of the issues involved in a buyout and I, like Darryl, would encourage you to seek out someone that specializes in corporate law, specifically for dealing with this type of situation. It's difficult enough when all parties agree, let alone when you have two current owners who do agree on some of the most basic aspects of the business.

PS. If it were MY company, each owner would get 50% of the profits AFTER all liabilities were disbursed (including salaries and payroll), so the one who isn't working would get SQUAT if the company were not making money.

[ianstew]

there are numerous factors, how the business is incorporated, etc.

Get a lawyer, as stated above.

and whatever you do, draw up a contract that states how much is paid, and especially how value is determined if one partner wishes to sell. If you do this in the beginning, it typically removes any headachhe down the eline.....