By Barry van Heerden
Consider the following scenario:–
Joe and Tim are partners in a business. Both are married and Joe’s daughter is a second year law student at a well-known university in Qld. Joe is involved in a car accident on the way to work and suffers severe injuries. After being in a coma for 4 weeks Joe eventually passes away.
In his Will he left everything, including his share in the business, to his wife (“Modest”). Any of the following scenarios can now occur:- (this is not meant to be an exhaustive list)
* Modest is prepared to sell Joe’s share in the business to Tim but she believes Joe was the “rainmaker” in the business and therefore his share in the business was worth $1 million. She is only prepared to sell it to Tim for $1 million. Tim on the other hand believes Joe was always dragging the chain and his share in the business is worth nothing more than $100,000.
* After discussing the matter with her daughter (and obtaining ‘competent legal advice’ from her daughter) they decided her daughter will step into the shoes of Joe and continue with the business. Tim (60 years of age) has no interest in continuing with the business with Joe’s daughter as a partner, especially because she has already indicated she will “get the business back on track”.
* Joe has provided personal guarantees to the bank for the overdraft of the business. The bank has now indicated that Tim has 21 days to provide alternative security or the overdraft should be repaid.
“Don’t be Joe and Tim, secure the future of your business”
Following the success of our 4 part series on business succession, Attwood Marshall Lawyers are pleased to announce the release of our Business Succession Guide. This guide combines all four parts of our guide into one easy to read resource on business succession. Attwood Marshall Lawyers is also proud to offer business owners and other interested parties the opportunity to take part in a business succession seminar. This seminar will encompass many important aspects of business succession and seek to provide interested parties with a more substantial resource on this very important aspect of business.