Buy-Sell Agreements for Closely Held and Family Business Owners
Format: Print Paperback
Special Price: $25.00
Regular Price: $29.95
Publication Date: August 2010
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Don’t miss the opportunity to purchase the Ownership Transition Bundle, which includes Unlocking Private Company Wealth and Buy-Sell Agreements for Closely Held and Family Business Owners.
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Buy-sell agreements are among the most common yet least understood business agreements and many are destined to fail to operate like the owners expect. Many, in fact, are ticking time bombs, just waiting for a trigger event to explode. If you are a business owner or are an adviser to business owners, this book is designed for you, providing a road map for business owners to develop or improve their buy-sell agreement.
Buy-Sell Agreements for Closely Held and Family Business Owners will be your guide for understanding what your agreement says from business and valuation perspectives. The book includes a comprehensive and yet understandable roadmap for business owners and their advisers. It discusses the three major types of buy-sell agreements – fixed price, formula and valuation process agreements.
Chris Mercer makes a convincing recommendation based on more than 30 years working with business owners and buy-sell agreements. The best valuation mechanism for most successful closely held and family businesses is one calling for a single appraiser that is selected by the parties now (i.e., before any trigger event), and who prepares an appraisal to set the price for the buy-sell agreement. Then, the appraiser will provide an annual reappraisal to reset the price every year (or two at most).
You will want to share this book with your fellow owners, your accountant, your attorney and your financial planner. Together you can insure that your buy-sell agreement will not be a ticking time bomb, but that it will provide a reasonable resolution, in terms of pricing, terms and process, if and when it is triggered.
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On Friday, August 15, 2014 I spoke at a conference of the Society of Financial Service Professionals in Orlando. Florida. It was the first time I have spoken before this group whose members include many financial planners–all of whom have at least one and many of whom have more than one professional designations. I attended […]
The following is a list of 25 questions to think about in assessing whether you as an owner are treating your business as an investment. If you are a business adviser, you can ask the questions on your clients’ behalf or, better still, in meetings with them.
You thought you knew what a marathon was – until you read about a decade old case involving a busted fixed-price buy-sell agreement in New York. Call it now a BuySellAgreementathon. More exhausting (and expensive) than the traditional 26.2 miles!
In this second post, Chris Mercer dives deeper into the Citigroup / Morgan Stanley buy-sell agreement outcome. If these results can happen to Citigroup and Morgan Stanley, they can certainly happen to you.
Overview of a Two Part Series Morgan Stanley and Citigroup entered into a joint venture (JV) dated as of May 31, 2009, with Morgan Stanley owning 51% and Citigroup owning the remaining 49% of the common member interests in Morgan Stanley Smith Barney Holdings LLC (“MSSBH”). The JV was evidenced by the Amended and Restated […]
Buy-sell agreements are business and legal documents that are created in the context of business, valuation and legal requirements. We need to engage in future thinking in order that our agreements will withstand not only the tests of time, but also potential challenges from the Internal Revenue Service.
Dated buy-sell agreements are worrisome for a number of reasons. Whatever the purposes for creating the agreements initially, it is virtually certain that things have changed since.
My advice as to the appropriate consideration of embedded capital gains for tax pass-through entities is that appraisers should not tax affect the gains in valuations for buy-sell agreements. You should discuss this issue with your tax advisor and let him or her walk you through examples of what happens to buyers or sellers under varying assumptions about embedded gains.
Booth Computers, a New Jersey family partnership (“Booth”), was created in 1976. In 1978, a related partnership, HCMJ Realty Ltd. was formed, of which Booth was a limited partner. Interests in Booth were given to James, Michael and Claudia Cohen by their father, Robert. The partnership acquired substantial assets over a period of more than […]
