Solutions for protecting and controlling who owns my business
“I don’t even know the guy!”
I was having lunch with a client and friend a while back when the conversation went this way:
“Yeah, when we started this business from just an idea 5 years ago, I thought it might become a good source of some additional income. I never thought it would be this successful. Right now, the other owner and I take a total of over $700,000/yr. from it and it is growing like crazy. The only thing I am concerned about is that I own 45% and the other owner has 55%. We didn’t complete a buy and sell agreement when we started and it still isn’t done. Now the other owner has received an offer to sell their part of the business to someone I don’t even know, even though it is my name that makes this work! This could be a real problem.”
How do you fix this?
The best way is to always have a written “business will”, in other words, a buy and sell agreement complete with funding provisions implemented at the beginning. These protect the owners and maintain ownership control in the event of an owner’s personal bankruptcy, death, disability, divorce, decision deadlock, termination for cause, or retirement.