February 26, 2020

Every business owner questions how much his or her company is worth.  As you approach retirement, this is a critical question so you can determine if you will have enough to live the life you would like to in retirement.  For public companies where a market exists, the question is easy.  It is not quite so easy for private companies.  Obviously, this question is critically important, for instance, when determining how much an owner might need to spend to fund a purchase of a co-owner’s shares.

Experienced professional exist who do this for a living.  Those persons will tell you that while there is a great deal of science involved, there i...

February 17, 2020

The dynamics within a business are numerous and all must be considered when reaching agreement on a buy-sell agreement.  Various provisions can be included in the agreement to help owners ensure all are treated fairly.  For instance, the agreement can include:

  1. “Tag along rights.”  These rights permit a minority owner to join in a sale a majority may be considering.  Imagine if a majority owner is selling his or her interest and the purchaser is someone the minority owner cannot or will not want to be in business with for whatever reason.  Or, consider if the majority owner obtains a favorable deal to sell his or her interest—the minority will h...

February 10, 2020

A buy-sell agreement is an agreement between owners by which they decide how to deal with the “6 D’s” that can challenge a business.  These “D’s” are death, disability, divorce, distress (financial, like bankruptcy), disputes (with your partners) and disengagement (e.g., retirement).  For instance,

  1. Death--the stock you own in your company is your personal property and, if you die, your wife or children or other heirs will receive it.  Is this the best solution for your business and your co-owners or would your wife or children prefer to be bought out at the fair market value of the shares?

  2. Divorce—as a marital asset, your divorcing spouse...

February 4, 2020

Likely, if you are asking yourself this question, then you have already started the process, even if it just a mental rundown of options.  And, of course, most people involved with succession planning would tell you that the best time to start is “yesterday.”  The reason is that the process can take a substantial amount of time.  For instance, think about discussing a “buy-sell agreement” with your partners.  While the drafting might not take long, reaching an agreement with your co-owner may involve a substantial period of time.  This is particularly true when there are differences in ages, family obligations, ownership amounts, etc.  When co-owners a...

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Kaufman Drozdowski & Grendell, LLC   29525 Chagrin Boulevard, Suite 250, Pepper Pike, Ohio 44122   440.462.6500