If you share ownership of a business, whether as fellow shareholder or partner, ask the What If question.
What if your What-If-Business Partner (WIBP) dies and leaves his shares to his wife (who dislikes you – intensely). What if WIBP wants out? What if you want out? What if WIBP becomes ill and unable to work?
Without a What If agreement you have a breeding ground for dispute. Even if you happily agree to go your separate ways, or agree with WIBP’s widow to buy WIBP’s share of the business, problems will invariably arise. WIBP, or WIBP’s widow, (who remember doesn’t like you) will prefer one method of valuing a business whilst you prefer another. Or maybe WIBP has decided to set up another business but won’t agree to not compete with the business you have toiled over for years.
Even if you mutually agree that you will buy WIBP’s share of the business (or vice versa) without a pre agreed agreement setting out a process for business valuation and timescale, you can find yourself in hair-pulling-painfully-frustrating-hugely- damaging-to-health-and-business-deadlock.
Increasing acrimony between you and WIBP (or WIBP’s widow, remember she didn’t even like you at the start of all this) means the dispute can, and commonly does, drag on for years – yes, years.
You can stop a difficult situation becoming a disastrous one by putting in place an agreement: call for free, no obligation initial advice.
What If, Part 2 deals with other problems that can, and frequently do, arise between you and WIBP – out next week.