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December 13, 2019 at 1:42 am #999930p9201Member
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(Apologies, I have already posted this in the wrong section i dont know how to move it, can the admin delete/move – thanks)
New the the forum but been reading the forum as a guest for a while.
i am based in WA, i have been offered an opportunity to be a minority shareholder & director in a new company opened by an existing company to target a new but associated market.
The other directors already own the main trading entity and various associated service entities, payroll, premises, equipment hire and so on.
I have concerns regarding the grouping of the entities for liabilities.
Additionally there is an anticipated purchased price for the shares in the new entity (yet the new entity essentially currently has nothing, other than leverage of the main entities history and branding and potential earnings/profits.
All the services will be chargeable, i don’t believe there will be a plan for this entity to procure its own assets and all hire will be via external market providers or the related entity (which i am not part of)
Obviously an agreement will have to be reached regarding the charge rates etc, which is yet to be discussed. of concern if its pro rata of turnover across the company i dont control the original cost base.
Finally i have a number of assets which need to be rearranged, including property both here and overseas, the main concern is the overseas property was purchased at a time when non resident mortgages were available , these are no longer available so i don’t know how i can refinance into my non married spouse name or a trust structure.
The numbers involved are reasonably large, the main entity turnover is generally $100m, the new entity would have a target of $15m the historical margins have been either really high or really poor essentially following the mining boom, recent years have been low and below industry average but stable.
I am genuinely interested in the opportunity but I am further concerned that as a long term happy and full filled employee of the existing main entity my substantive role will be compromised as there is a large potential for contentious issues to be encountered, in particular associated entity charges. I dont want to jepordise my employee position , but likewise i don’t want to reject without basis the opportunity being provided to me as i am genuinely interested and keen if structured and set up correctly.
To be honest shareholder only scenario would probably be preferable but for various reasons this is not an option if it was set up on this basis i would not be overly concerned with the profits, but as there is directorship risk, i am then obviously very concerned with the profits. as i have to balance the risk vs reward.
Has anyone been in a similar situation getting into business in a related entity as a minority share with others who own the related/service entities.
ThanksDecember 13, 2019 at 3:19 am #1221912Paul – FS ConciergeModerator
- Total posts: 3,141
Hi And Welcome to Flying Solo [USER=116624]@p9201[/USER] . It is great to have you!
Thank you for joining our community and posting.
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