An owner is offering me a piece of ownership, since sales are down and so is commision. Since I will not have anywhere near enough to control anything, I view this as mostly symobolic, and somewhat of a protection in case of a buyout by some third party. Do I have any legal liabilities to worry about? Does he have any liabilities from me or my side?
Employee Buyout
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Employee Buyout
by pjdevereaux2003 » Tue Nov 14, 2006 12:56 pm
You would share any liabilities with the current owner just as you share the ownership of the store.
You are right - this is a symbolic gesture. Unless you are truly going to be this dealer's partner, with a mechanism in place to purchase/earn additional shares or sell the ones you get at some future point, it is indeed a symbolic gesture.
Doesn't mean you shouldn't do it. Just don't trade current income for the promise of future returns!
You are right - this is a symbolic gesture. Unless you are truly going to be this dealer's partner, with a mechanism in place to purchase/earn additional shares or sell the ones you get at some future point, it is indeed a symbolic gesture.
Doesn't mean you shouldn't do it. Just don't trade current income for the promise of future returns!
- pjdevereaux2003
Employee Buyout
by JustBob » Tue Nov 14, 2006 1:32 pm
zekensted,
I have seen some buyins that worked very well and some that were failures! Any financial transaction requires work on the part of the "investor". It appears that you will be investing your time and efforts in exchange for ownership so you should execise some deligence before proceeding.
Do some research so you correctly understand what ownership entails. You may want to seek counsel from someone that is knowledgable. That may require paying a professional if you do not have a friend or family member that is qualified.
Concerning liabilities - Stock ownership in a corporation DOES NOT make the stockholder personally responsible for the liablilities of the corporation. This would only occur if you issued a personal guarantee a creditor. Most likely the Dealer Principal was required to do so unless the corporation is extremely well capitalized.
If the owner is truly seeking a "partner" and not merely using this to reduce compensation it can greatly benefit you. It can also be a complete waste of your time.
You would be astonished at the number of present dealer principals that got their break this way. Right place, right time, a lot of luck, and hardwork, and your name could be on the building.
------------------
Have a tremendous day
Bob Britting
I have seen some buyins that worked very well and some that were failures! Any financial transaction requires work on the part of the "investor". It appears that you will be investing your time and efforts in exchange for ownership so you should execise some deligence before proceeding.
Do some research so you correctly understand what ownership entails. You may want to seek counsel from someone that is knowledgable. That may require paying a professional if you do not have a friend or family member that is qualified.
Concerning liabilities - Stock ownership in a corporation DOES NOT make the stockholder personally responsible for the liablilities of the corporation. This would only occur if you issued a personal guarantee a creditor. Most likely the Dealer Principal was required to do so unless the corporation is extremely well capitalized.
If the owner is truly seeking a "partner" and not merely using this to reduce compensation it can greatly benefit you. It can also be a complete waste of your time.
You would be astonished at the number of present dealer principals that got their break this way. Right place, right time, a lot of luck, and hardwork, and your name could be on the building.
------------------
Have a tremendous day
Bob Britting
[This message has been edited by JustBob (edited 11-14-2006).]
- JustBob
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