Skip to main content

When is 25% ownership in a small, privately held business not really 25% ownership?

When you try to sell your shares.

I got a newsletter from a BVWire (a valuation and buy-sell deal compilation company) and one of the articles dealt with the complicated issue of minority ownership in a business. While not boring you with the details of the case, the bottom line was a court decided the firm’s operating agreement specified the sale of shares called for fair market compensation of the assets of the business but not the interest (ownership) in the business.

So, some 25% owner in Oregon is not going to be happy because he, she, or the attorney didn’t catch this qualifier. Details are important and think of all the things we must do regularly where lack of details can confuse or derail things.

Communication – I just read another newsletter about properly addressing an audience (and the same applies to an audience of one, two, or three not only a room full). You must direct your message to whom you’re speaking. Talking to employees about needing to grow faster when they’re already working 50-60-hour weeks doesn’t cut it.

Agreements – I work in the buy-sell world where there are always discussions over the same issues (wordings). The same is true in employee agreements, vendor agreements, etc.

Life – Don’t be specific with kids and they’ll find any little loophole. You sure wouldn’t want your contractor missing a few things or your home to be like an oceanside condo in Florida (collapsed). And just think of all the little details musicians, artists, athletes, and others pay attention to. Or maybe you’ll be like a good friend of ours who didn’t pay attention to community property laws when getting married and got burned big time during the divorce. (One of them had a lot of assets at the time of the marriage and the other was in debt. Guess who got 55%?)

It’s always the little things that take the most time and effort.

“Never marry a man you wouldn’t want to be divorced from.” Nora Ephron

“Success is a lousy teacher. It seduces smart people into thinking they can‘t lose.” Bill Gates

Get Started With A Consult

This field is for validation purposes and should be left unchanged.