On Apr 14, 11:14 am, "W. Wells" <ot...@[EMAIL PROTECTED]
> wrote:
> My son has a chance to buy a small percentage of the company he works
for
> (their main reason is to keep him in the company) and was asking my
advise.
You said "buy".
What are the benefits to your son? Is there a salary increase also?
Are there voting rights, and if so, is it realistic that his vote will
ever count? I'm guessing he would get a pro-rata share of the profits.
He needs to review the last few years tax returns. I know of many
small business owners that expense so much stuff through their
business that the company rarely shows a profit and they hardly draw a
salary. Instead they make up for it through "benefits" (i.e. company
vehicles). Is it likely they will ever sell? That's the real value of
ownership in small business.
Perhaps this is a token conscession that has no real benefits designed
to keep your son from leaving. Or perhaps it's the opportunity of a
lifetime. As others said, consult a lawyer and a CPA.
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