Selling 50% of my Ltd company to become partnership

[cherise blythe]

hi.....I have a small company that is a jewellery buisness (online) with a retail premises. Someone who works closely with me has let me know that they would be very interested in becoming a equal partner in my buisness to create the whole "2 heads is better than 1" concept, which I am very excited about. But I have now got to construct a figure that represents 50% of the buisness and it's potential. As the buisness has only been running for 14mths online and only 5mths as a retail premises I'm finding it very hard to put a definite value on this deal. As I'm not selling this half due to financial issues, it would be to make it stronger and more profitable I feel the value changes somewhat??

If any one has any advice or an easy way to for me to value the company, I would be very appreciative as this is my first buisness and am learning something new everyday.

Thanks in advance for any responses,

Cherise

 

[japancool]

A 50/50 split is never a good idea, because it means that either of you can block the other.

 

[Clinton]

As the buisness has only been running for 14mths online and only 5mths as a retail premises I'm finding it very hard to put a definite value on this deal.

It probably has little to no value (apart from value of the net assets). But if you want to provide your turnover, net profit etc for the first completed year - you know, the kind of numbers people need if they are going to make an informed comment on value - I could advise further.

As I'm not selling this half due to financial issues, it would be to make it stronger and more profitable I feel the value changes somewhat??

That sounds greedy to me. If you're looking for justification for an extortionate valuation solely on the gounds that you don't need to sell, you've come to the wrong place.

 

[The Byre]

This, if you do it, will end in tears - guaranteed!

Most partnerships do!

 

[STDFR33]

This, if you do it, will end in tears - guaranteed!

Most partnerships do!

The only partnerships that seem to work is where there is one clear leader, and the other is happy with this. And this is as rare as unicorn poop.

 

[AllUpHere]

If you sell half of a Ltd company it doesn't become a partnership.
You need to get help with the paperwork if you go through with this sale. Making mistakes with basic terminology is a sign that this could go wrong quickly if you try to do it yourself.

 

[Clinton]

Good point. Her business is indeed a limited company incorporated on 21-12-2015.