There's a method I've heard of in which Partner A offers Partner B a price for Partner B's ownership. Partner B has to either: 1) find a third party to make a better offer (which Partner A has the right to beat); 2) accept the offer; or 3) can force Partner A to share A's ownership for the price A offered B. So if A owns 60% of the business and wants to buyout B who owns 40% and offers B $400, B can buyout A for $600. The result is the partner seeking to buy out the other makes a fair offer. Does anyone know what this method is called? I thought it was a Texas Showdown, but I can't find anything in Yahoo Search that matches that.
2007-03-02 10:07:03 · 1 answers · asked by Anonymous in Business & Finance ➔ Small Business
Legally speaking, the method should be part of the partnership or LLC agreement, sub-titled buy-sell. Otherwise, it must be negotiated in good faith and at fair market value. You derive this from the balance sheet of either the most current year or the past three years. Whatever you decide, should be reviewed for legal intactness so as to comply with governing law.
2007-03-02 10:22:04 · answer #1 · answered by Joseph H 4 · 0⤊ 0⤋