Sell share of family business

D

Dro123

Registered User
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Good morning all,

I have been involved in a small business with one other shareholder for a long number of years now and I want a change. Family businesses can be quite intertwined and complicated and my desire to exit may possibly cause some acrimony. Its a good solid business (turnover around 200K) and should continue to do well.

How do I go about valuing and selling my share of the business. We have shareholders agreement in place which stipulates that I must offer my shares to the other shareholder before offering to a third party. We serve quite a niche market so the other shareholder is the obvious choice. I'm wondering what would happen if they were unwilling or unable to buy my share. Do I need a solicitor or an accountant or both ?

Any advice would be very much appreciated. Thanks in advance.
 
Does the shareholders agreement say how about valuation?

Comments like its a solid business and €200k turnover are a bit irrelevant.

What's the gross profit, what the level of directors remuneration, what's the net profit.

What the value of the assets in the company?

If you leave to the have to bring in someone else to do your job.

Needless to say what ever you think it's worth the other side will think it's about half.

You have a couple of options sell to the other shareholder, sell back to the company or sell to a third party. There is also a payment for compensation for loss of office which is tax free which works in some cases.

In most cases the third party option is not feasible and the other party can't afford to buy so you left with a company buy back.

In a lot of cases the company accountant represents all three parties and can broker a deal that suits. But if you want to go to another accountant first that's fine but there will be a trade off from what you want.
 
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