Who are you in business with?
'No, I'm not interested...I own my own business - I'm my own boss and no one has any hold over me. I would never need shareholder protection...it'd be a waste of money'
-'So you don't have anyone to report to?'
'No. As I say, I'm the boss.'
-'Cool, It must be great to be able to make the decisions without anyone else in the picture'.
'Well, hang on, I didn't say that I make the decisions alone...I do that with my business partner, Tom.'
-'Oh, so you and Tom are both the boss?'
-'And you get on?'
Oh, yeah, he's like my brother. I've known him for years.
-'It must be nice to have someone you can trust so much. Do you own half the business each?'
'Yes. If anything were to happen to me, I know he'd look after my family.'
-'Cool, so he could buy your shares from your wife?'
'What? Why would he need to do that?'
-'Well, your shares in the company would pass to your wife, right?'
'Katie? Yes. I guess they do...yes, course they do.'
-'So, what did she say when you told her that she'll be running an IT company with Tom?'
'Well, er, well, she'd have the kids by herself so she wouldn't be able to do it.'
-'So Tom would just buy Katie's shares then?'
'Well, This company is worth £2 million. I'm pretty sure Tom couldn't put his hands on a million quid.'
-'Oh, cool...so Katie will sell her shares to someone else then?'
-'Well, if Tom can't buy Katie out, and if she doesn't want to run the company with Tom, she can sell her shares to a third party. Is Tom happy that he could end up in business with someone he doesn't know?'
'Oh, I see... Hang on... what happens if something happens to Tom? I could end up in business with someone I don't know! I can't afford to buy his shares! I'd need a loan!'
Stakeholder protection is something that you hope you will never need. Sometimes the worst happens. Then things domino.
Get in touch if you're a business owner and want to protect your interests.