Business Ownership

Hey, Partner, We Need a Buy-Sell Agreement

If you have partners, you need to consider what will occur when a partner wants to retire or suffers death or disability. One way to minimize chaos and control the order of events is to design and execute a buy-sell agreement. Desirables include: 1. Preserve control by restricting transfers or sales of company stock to persons outside the company or owner’s immediate family. 2. Protect business assets and ongoing operations. 3. Provide cash or other assets (e.g., life insurance proceeds or promissory notes) to the retiring or disabled owner or family of the deceased. 4. Establish a method for determining the value of the business for estate tax purposes and transfer or sale of company stock. 5. Assure sufficient liquid assets are available to fund a buyout, pay federal and state estate taxes, and meet financial needs of surviving family members. 6. Reduce some of the risks inherent in grants of incentive stock awards to key employees.

Business Owner Imperative: Ensure Continuity

Sudden and unforeseen events such as tornadoes, floods, fire and hurricanes can put you out of business in a heart beat. Just as the business owner must work each day to secure profit and liquidity, he or she must have contingency plans for the unexpected. So, identify critical assets, list things that could damage those assets, develop mitigation plans and conduct a periodic review of that plan.

Time to Exercise Your Option to Buy Out a Partner?

There’s no doubt business profits are down so now might be a good time to buy a shareholder out and increase your ownership percentage. Just hope that shareholder doesn’t have the same idea.

Interest Free Loans Now Available

$35,000 interest-free loans are now available to small businesses as part of the America’s Recovery Capital loan program approved by Congress in February. The loans are for small businesses that have been profitable one of the last two years, but are not struggling. The SBA will pay lenders the prime rate plus 2%. All SBA fees will be waived and the U.S. government will provide lenders a 100% guarantee on the principal amount in case of default by the business.

Is Your Self-Esteem Derived from Your Income Statement?

Too often, a business owner’s self-esteem is derived from his success or his net worth. This is an issue that is more prevalent than people would think, our experts say. The answer in handling the issue lies with the owner’s ability to diversify his life and to find meaning and enjoyment in other areas besides the business.

Boom to Bust in Four Years: Don’t Let It Happen to You

Just a few years ago Jack and Seth were on top of the world. Both in their late 40s, their nascent business was really hitting its stride. An importer of high-end designer tiles installed mainly in high-end homes, revenue had been growing rapidly, hitting $3,200,000 in 2004. Each of them drew a $150,000 salary and another $400,000 fell to the bottom line that year. They bought a new 20,000-square-foot warehouse and each a new house and truck.

What You Need to Know About Appraisals

Contrary to what some people believe, an appraisal does not give the value of an asset. Given the important role appraisals play in our economic world today, taking this to heart could very well save you a lot of money one day.

You Can’t Sell Ownership to Just Anyone

Among the many issues to consider when selling ownership in your business is whom you sell to.

Protect Yourself When Gifting, Selling or Transferring Ownership

Quick Take: When gifting, issuing, transferring or selling ownership interests in your business, such as stock, units, warrants, options or convertible securities, talk to your attorney. Tell him or her you want to do the following.

Terms That Private-Company Owners Should Know

Articles of Incorporation (or Certificate of Incorporation): Instrument under which a corporation is formed. The contents are prescribed in the particular state's general incorporation statute.
Bylaws: Regulations, ordinances, rules and laws adopted by an association or corporation for its government.
Board of Directors: Elected representatives of the members or shareholders of an organization who are collectively charged with selecting [...]