|
|
What happens in a family-owned business when a member wants to sell their share?
Author: By: Al McClymont
This is the second part in a series of articles that address common problems
and issues in family-owned businesses. The articles are based on an interview
between Al McClymont, CEO of Autologica Dealer Management Systems, and J.C.
Aimetta, an expert and coach who specializes in family-owned
businesses.
Al McClymont: Several companies I personally know of
have suffered huge troubles that were even irreparable sometimes, both for the
company itself and for the relationship among the members involved, the
emotional relationships... when a family member decides they want to, or that
they need to sell their share of the family business.
J.C.
Aimetta: Well, in these cases, the first thing one should think about is how
to avoid this actually happening, how to prevent the possibility of this
happening.
First of all, we must distinguish between a person who sells
because they want to, from a person who sells because they have to, because they
have no choice, because they need the money for an urgent personal situation, an
illness, a child who has a scholarship abroad, or something like that.
In
this type of situation, the family-owned business should have a liquidity fund
to be available, under equal conditions, for all partners to use in cases of
personal emergencies. This liquidity fund, generally placed in investments that
can quickly be turned into cash, implies an immobilization of funds that the
family business usually does not want to have. But it is a guarantee, when an
emergency situation arises, that prevents someone from being forced to sell
their part.
Another thing to consider is that no one can sell unless
there is someone willing to buy. Therefore, when someone wants to sell their
part, it should be stipulated, written and signed, to whom the part must be
offered. Because it is not the same to offer it to a brother, to a cousin, to
the company itself (the company can reabsorb the partner's part), or to a third
party. Because when an angry family member decides to sell to someone who is not
a part of the family, they are immediately including among the owners a person
who is not a family member. In summary: the company stops being a family
business.
In the next part of this interview, we'll talk about how a
family-owned business can reconcile the interests of family members who work in
the company, with the interests of those members who don't.
|
|
|
|
Print this page
