股东生意保值规划/Business Value Protection Planning

30 Jul 2014
股东生意保值规划/Business Value Protection Planning
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If you have been started business with your partners & the business is profitable, you should have an exit plan for your business to avoid creating problems to your family & your partners upon sudden demise or incapacity, ill health. Having the Business Protection plan, it provides guarantee sale of the business at full & fair value at agreed pricing & smooth & quick transfer of the business sale process with no interruption of the business operations.

Common problems arise without proper Business Protection Plan:

1) A new partnership is created due to the inheritance of shares/interest by the inexperienced heirs. Chances are    this new partnership may fail.

2) There is no pre-agreed price for any sale to take place when the heirs decided to sell to the surviving co-owners. As a result, it may take years to settle a transaction price.

3) Some of the unqualified heirs may insist to be the directors of the company and be active in running the business. This may lead serious disruptions and disputes within the management.

4) It is possible that co-owner may decide to abandon the business and start their own due to disputes with the heirs. However, starting a business may take a lot of time & money.

5)Loss of profits & uncertainty about business future success.

Ask yourself:

1) If a co-owner dies today, can you work with his/her family members to run the business?
2) Will the co-owner's family members know how to run the business with you?
3) Can they work well with you?
4) Would you beneficiaries able to get a fair price?
5) Do you able to buy out the co-owner's shares/interest from the family members where there is no pre-agreed price in a written agreement?
6)Can the shares you are purchasing be able to transfer quickly to you?

How can you protect your hard work in building your business in the event of the above issues happen?


Real scenario
Mr. A & Mr. B were childhood friends they were business partners in manufacturing of stationeries.
Mr. A holds 60% & Mr. B holds the remaining 40%. Ever since they started, the business had grown by leaps and bounds. Annual profit estimated RM2million.The accountant indicated that the business should have a value in the range of RM10. Tragedy stuck. Mr. B died in an accident.


Although Mr. B had written his will during his life time, giving away his shares of the business to his wife & children and thought that the company share would be sufficient for the expenses of the family members.

After Mr. B pass away, Mrs. B wishes to dispose her shares of the company to Mr. A.  Mr. A turn her down, because he had already control and run the business. When Mrs. B wish to dispose the shares of the company, but there was no outsiders willing to buy her shares. She pleaded Mr.  A to reconsider the purchase of the shares. Mr. A finally offers her RM500,000 only for the shares worth RM4 million. Mrs. B had no choice but to accept a big loss in value.
 
A 先生和B
先生是儿时的玩伴。他们一起成立了制作文具的工厂。A先生拥有60%股份,而B先生持有40%股份。公司成立至今,生意蒸蒸日上。年盈利达2白万。B先生不幸意外过世。
 
虽然B先生生前立了一份遗嘱给她的妻小,并认为他留下来的生意足够照顾家人的生活费。也相信他相识多年的A先生不会过河拆桥。
 
B先生过世后,B太太想把股份卖给A先生,却被拒绝。A先生已经完全掌握公司的运作。在没有外人愿意买下她的股份后, B太太只好请求A先生重新考虑购买其股份。A先生最后只出价五白千买下市价4百万的股份。B太太只好无奈接受


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