By Bill Yanger
You and your business partner have slogged through the last 15 years showing up at 6 a.m. to turn on the lights and grease the widget machine. You, the outgoing, talkative type-A schmoozer, handle the handshaking, sales-pro, customer hand-holding issues and she, the careful, meditative soother, makes sure employees are competent, sober and satisfied with their Christmas bonus - when you are able to muster a Christmas bonus. One of you usually stays late so the other can get to a little league game or chamber of commerce dinner. More Saturdays than not are spent sitting across from each other catching up on the paperwork a bruising week has not allowed.
There was that moment you high-fived each other when Super Gigantor Company called and not only cleaned out your existing inventory but placed an order for the next quarter that dwarfed all of your last quarter sales combined. And together you sat in white knuckle terror as that pleasant IRS auditor with a spooky twitch took copious notes while scanning your general ledgers from the three years before you had the good sense to have an accountant do your books.
She helped handle your father's funeral arrangements in Tiny Town, hundreds of miles away and well, you know, a place you fled from 30 years ago and never looked back. You introduced her to her second husband, your barber, and you know, nice guy and all but not as sharp as his scissors.
In all, the little-company-that-could has chugged along, providing you both with a comfortable living and promises of continued growth and prosperity. Life is good.
And then one Monday morning you come in at 6 a.m. to find your barber sitting at your desk sniffling something about your partner leaving him for a Baptist preacher turned new-age Acai berry guru in some Ganges River ashram a few kilometers outside of Bangladesh. She took her yoga mat, her carcinogen-free water bottle and a bamboo incense burner but left behind everything else, including paperwork transferring her half of your company to the barber. He wants to know how much is in the company bank account.
Okay, so the ashram in Bangladesh is a bit far-fetched. Or is it? Before you sprint down the hall to make sure your business partner has not bought a first-class ticket on Air India perhaps it's time to consider this relatively simple solution:
A well drafted Buy-Sell lets the owners, in a calm and thoughtful pre-need atmosphere, decide upon a mechanism by which respective interests will be valued when it comes to divvying them up. It also lets you decide who will be eligible to succeed departing owners if you determine that you do not want or cannot swing purchasing the stake yourself. It can allow majority owners to "drag along" minority owners who might otherwise unreasonably object to a reasonable sale offer or entitle minority shareholders to "tag along" at the same value per share as that of the majority. Finally, the buy-sell provisions can also save a lot of time and heartache by adequately protecting the interests of your loved ones if they are left behind to sort out the pieces after you are gone.
This is not a difficult concept folks. Nothing too complicated, just a contract between owners that spells out in clear language who gets control of an owner's share of a company when he or she decides to call it quits, files bankruptcy, becomes disabled, divorces, dies or, heaven forbid, simply flakes out and leaves to find inner-peace in Bangladesh.
Or hey, maybe you're the one thinking of heading to the ashram with the yogi guru. Have you priced first class tickets on Air India lately? Nothing like a nifty buy-sell agreement to simplify your asset liquidation and expedite your escape to self-awareness. Talk about inner peace!