Taking over a family business

[jake34]

Hello, I would be extremely grateful for any assistance and advice from the members of this business forum

I have two questions regarding the take over of a family business

1. I'm am a (33%)shareholder and director of a family business which I basically run
Day to day Along with staff, my father who started the business and my mother are the two other share holders(34% father/33%mother) they have offered for me to buy them out and take over the company as my father is upon retirement age, he still wishes to work on a part time basis but does not wish to have the responsibility of all the day to day running of a business which I now do anyway, my fathers accountant the one he has had for years is handling to best way to go about the transfer of shares so my question is, What would be the best way to handle the buying out of their shares/taking and taking over the company? To make sure the accountant is giving the best soloution.

The accountant is having the company valued, so I'm assuming I should maybe
Also have it valued just to make sure it is correct? There is also four residential property's in the company that are let out, Seperate to this I am a 25% shareholder in another property company of several property's owned by my parents that are separate from the main business, the accountant did mention that on discussion with my father that they would remove me from the property company Put the four property's within the family business into the other property company and then remove me from that, So my parents have full control of all the property's including the business premises.

Once the company has been valued with all stock and assets and a figure to buy them out agreed, the company has a healthy cash flow in the bank and the accountant mentioned that this could be used to buy out my parents?

2. The second question is on restructuring the new company, I am married with children And very sadly I forsee a divorce looming, we've been having problems for years and are basically together for the children, I am in no means intending to shirk my responsibility and what ever happens I will support them both financially and emotionally but assuming we cannot make it work is there a way I can set up the new company so it is protected, the house and everything we own would be split but going forward I feel if there is a way the business could be protected in case it went before the courts, which I do not see happening but am working on worse case scenario.

I hope I have not come across as cold, I am willing to compromise and be fair with regard to to buying of the company and if it comes to it the supporting of my family
But I worry without forward thinking I could end up in a mess and could be cleaned out.

Thank you for reading and thank you for any advice given

Jake

 

[Clinton]

I would love to help, but I'm really struggling to understand some parts of your post. And some of the bits I do understand seem to contradict what you've said elsewhere ... so I've obviously not understood them correctly. In particular...

Seperate to this I am a 25% shareholder in another property company of several property's owned by my parents that are separate from the main business, the accountant did mention that on discussion with my father that they would remove me from the property company Put the four property's within the family business into the other property company and then remove me from that, So my parents have full control of all the property's including the business premises.

For goodness sake, insert some full stops so we know where one sentence ends and the next one begins! It always amazes me when people want others to take the time to help but can't be bothered taking the time to make their post easy to understand (and I'm not complaining about the "property's" type of genuine grammatical mistakes).

From this para I understand that you want to leave the business and that your father wants to take everything over. This is exactly the opposite of what you've said earlier.

The accountant is having the company valued, so I'm assuming I should maybe
Also have it valued just to make sure it is correct?

Why do you assume that? If you're making an assumption, at least provide us the reasoning behind it so we can answer your question about whether it's the right decision!

Once the company has been valued with all stock and assets and a figure to buy them out agreed, the company has a healthy cash flow in the bank and the accountant mentioned that this could be used to buy out my parents?

The company will have a healthy cash flow only once it has been valued and a price agreed?

 

[jake34]

I hold my hands up and apologise for the lack of a clear explanation and also very poor grammar.
i do not actually have an excuse but will think of one if you give me a minute.

i will rethink and retype my message.

 

[Mr D]

In a split / divorce would the company you part own or own fully not be seen as an asset of yours when deciding what should be split?
No idea how you would protect the business - you own something of value.
Can think of several people I have come across over the years who lost their business to the ex in divorce.

 

[S2K]

It seems that you don't trust your accountant. Why do you retain people you don't trust then?

 

[AllUpHere]

I've only read the OP quickly, but would an accurate summary be that they want you to own more of the business, but actually get all the valuable property assets as far out of your reach as possible?

 

[KAC]

You may find it worth speaking to @The Resolver Have a look at is website h t t p : //w w w.the resolver. com/?page_id=113 (REMOVE THE SPACES

 

[Iain_Henderson]

I think I see what's going on here. The properties have value which is easily realisable. You currently own a third share in them. If you divorce their value will be taken into consideration.

However, if your parents buy you out of the property business you will, personally, have a wedge of cash (which could be used in a divorce case). So you use the cash to buy your parents out of the family business. Now you are left with only the (family) business.

If a divorce case were to happen what value would be given to the business now - it's no longer got the four rentable properties or the original owners?

I think you have some smart parents! Get some independent advice whatever though.

 

[Mr D]

Using the cash to buy parents out of the family business would suggest that to the parents and the OP the business is worth more than that sum. And the OP would own the business fully.
Would a smart divorce lawyer not see that?

 

[tomhow1990]

Good luck

 

[The Resolver]

You may find it worth speaking to @The Resolver Have a look at is website h t t p : //w w w.the resolver. com/?page_id=113 (REMOVE THE SPACES

Thanks. In fact my site at www.BoardoomResolve.com may be more relevant. I can guide you into various options. You also need a family lawyer with company law expertise (few do) and I can refer you to one.