QUESTION
I own 15% of the businees where I am employed. The primary owner is selling the busines. Do I get 15% of the sale and 15% of profits year to date?
Asked on Jun 15th, 2012 on Business Law - North Carolina
More details to this question:
The primary business owner holds 85% of the business stock and I hold 15%. I have earned 5% of the business for each year I work here and was supposed to buy out the primary owner at the 10 year mark. He now wants to completely retire and sell the business to an unrelated party. When he sells he wants to only pay me out the 15% for the sale of the business. Am I not also entitled to 15% of the profits year to date as of the closing date for the sale? In my eyes profit is profit, whether it is from the sale of the business or from the operations of the businees up until the date of the sale. Thank you for your time.
1 ANSWER
Reviews not shown
1 Award
As a general matter, when you are a stockholder of a business and the stock is sold, you get your share of the sale proceeds of all of the stock. The profits of the business belong to the business, unless they are distributed to all stockholders prior to consummation of the sale; in other words, in the absence of a distribution of the interim profits, the profits belong to the buyer, not to the selling stockholders.
Answered on Jun 15th, 2012 at 2:07 PM