Company Buy Out

[minnehoma]

I am a Director and Shareholder of a company that may possibly be getting bought out. Within the purchase I stand to get a lump sum for my shares but my main concern is over whether my contract will be changed.

Can the prospective buyer change my contract ie. salary, holidays, private health etc.

 

[fisicx]

Are you an employee of the company or just a director/shareholder?

any changes will be part of the negotiations. You are probably best discussing this with the broker dealing with the sale. It’s quite likely the new owner will no longer want you on the books.

 

[pentel]

It will all be down to negotiation of the Share Purchase Agreement (SPA).

You will almost certainly be required to resign as a director. You will cease to be a shareholder. Your ongoing position may exist long term, be limited to a hand over period or the sale may be dependant on you resigning. It is all down to negotiation

 

[Newchodge]

If you have a contract of employment that will transfer, unchanged, to the new employer under TUPE. If you are a director without a contract of employment you have no legal protection.

 

[WaveJumper]

All of the above and my advice would be if not done already be clear with yourself what you want out of the negotiations before being blindsided. The bottom line is they may well not want you in the company going forward, either immediately or as suggested at a future date after a "handover period" which could involve holding back on your share buy out until successfully being completed.

Having seen several "buy outs" / "take overs" in my time be ready for the unexpected. Are you happy with the process, what does your shareholder agreement say, have you taken legal advice.

Unless like someone I know who got a whopping big multi million pound payout and his only concern was delivery of his new boat, are you going to be made for life or need to seek a position elsewhere.

Be prepared for the unexpected

 

[MikeJ]

You need legal advice for the company, and you need legal advice as an individual. Don't get confused over the two sets of advice.

I got a new contract, and had to stay a year. I lasted just over two, by which time I'd served my purpose. It's a massive shift for you as a person too - you're no longer in charge of your destiny, and there's a good chance you won't want to stay there very long.

 

[DontAsk]

If they need you to stay for a handover period due to your knowledge/experience then you are in a stronger negotiating position.