Been offered to buy into my employer.

Hey guys
Not property related, but today my current employer, offered me the opportunity to buy into the business.

Has this ever happened to you?
The investment required would massive but not sure how to even find this...

 

What is the current structure of the business - company? Partnership? Sole trader?

Does the offer come with any management/voting rights?

 

The upside would be you would understand the business model and know the cashflow..
Depending on in money terms what massive means then the only question to ask is Why.
Never happened to me as most people trying to sell off part's % wise of businesses would have a exit strategy and sometimes a hidden agenda. Good luck.

 

Hey,
Company with both management and voting rights

 

Just to be clear, you are being offered only shares in the company, no directorship?

 

Why are they selling? Looking to retire eventually? Need capital to expand? Want to bring in a partner because it takes too much of their time? Or......

Have you seen the financials? Do you understand them? If there anything you can't see from the financials (cash transactions, business relationships, etc).

 

Hi the exit strategy is the founder has another business,

Directorship as well

 

What are you going to get out of it?

 

May have implications on future borrowing

 

If they sell to someone else, what happens to your job? You may keep it, but find yourself working in an alien culture.

 

Could end up working with Martians?

 

Does the business have any upside or is it a high cashflow business?
Remember to consider the investment aspect of it as opposed to just buying yourself into your own job..

 

As a shareholder, worst case scenario you lose the money used to buy the shares.

As a director, worst case scenario you could lose everything, especially everything in your name.

 

… and especially remember to consider the risk aspects of it

 

If your employer offers for you to buy in the employer should have a sale document to encourage you to purchase. And often the employer will vendor fund the sale or have arranged the funding with the bank.

There is a raft of legal, business, risk and tax considerations.

Effectively it is there job to do the heavy lifting. If it is not done arrange a meeting with the employers accountant, your boss and yourself and ask for how the transition works.

If not of that happens - it is not a real offer. Just a thought bubble.

 

Thank you all for the reply, i have a meeting with the board this week, so lets see what occurs.

 

If my boss wanted me to “buy in” then they’d have to be in deep deep trouble because they’d be scraping the bottom of the barrel lol and they’d be wanting to be pushed over the edge and into the abyss.