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Discussion in 'Growing and Managing a Business' started by englishg, Sep 30, 2009.

  1. englishg

    englishg
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    We are shareholders in a family business that has been operating for 50 years.
    We inherited our shares when my husbands dad died this year.

    We have an Aunt who has been Treasurer for the business since 1972. The position is supposed to rotate among the shareholders but it has not.

    The other shareholders including us have requested copies of credit card statements and other statements for our review from the Aunt who is treasurer ad she has not yet produced them. Any advice as to what we can or should do. The business does have an Attorney but we are not even sure what his job is other than to represent the business.

    We would appreciate any advice you could give.

    Thank you
     
  2. seanstevens

    seanstevens
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    Hi englishg

    If you value you business and would like it to continue for the next 50 years then the answer is simple.

    Contact your Aunt in writing. Ask her to produce the requested documents within 7 days (give an exact date).

    Contact the attorney and request a meeting with him. The aim of this meeting is to figure out if he/she is the right person to represent you going forward. If you do not think this is the right person, find another one who can do the job you want them to.

    If you have ANY doubts at all. Phone your credit card company immediately, explain to them that as a company you have some doubts about the usage on the card and request a statement be sent to you immediately, it may cost a few $ but is worth it. It may even be worth asking them to put a temporary hold on the card so no further spend can occur or at least ask them to contact you (or another shareholder) to get approval for any new transaction. Alternatively, ask them what the balance is and request they lower your credit line on a temporary basis so that no further transactions can go through.

    If your Aunt does not give you the requested documents, ask your attorney (or a new one) to contact her and demand them legally.

    You should not feel bad for doing this. If she has nothing to hide she will hand over all the documents, if she is hiding something, better to find out now than when the credit card company or debt company knocks on your door.

    All of the shareholders need to get together and set out some ground rules for who runs the business, who handles the attorney, who deals with the books etc. I would recommend that you have a rule in place that means the bookkeeper should be independent of all of you and the family and has set goals and rules to follow to avoid any thing bad from occurring.

    Don't be afraid of bringing in a third party to give your business the once over and looking at all of your business processes to ensure you are doing the best job you can do and bringing in top $ profit. It may cost you some cash now, but you could easily recoup that in the future and more.

    Feel free to contact me if you have any further questions.

    Sean
     
  3. Fergal

    Fergal
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    Welcome to Business Advice Forum Englishg and thanks for asking your business questions.

    I'd agree with the excellent advice you have received from Sean. As shareholders you are entitled to see the financial statements of the business. You could try ringing your bank immediately and asking them if they can post you copies of your statements. If they say that you don't have the authority to receive this information, ask them who has.

    Sounds like all the shareholders and your treasurer need to get together and have an open and frank discussion about everyone's roles in the business and what you are entitled to. You might want to agree an agenda beforehand, that would include discussion topics such as;


    • Who is responsible for what and rotation of roles
    • How disagreements are to be handled
    • Procedures for dealing with shareholders who want to leave the business
    • Distribution of profits and handling losses
    • Access to company information
    • Preparation and distribution of reports
    • Regular review meetings.

    What legal structure does the business have?

    Are either you or your husband employed in the business?
     
  4. englishg

    englishg
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    Fergal thank you for your reply the information is very helpful.

    We have an S corporation and my husband does work for the business on a part time basis during the summer.



    Sean
    Thank you for your reply your information was very helpful.

    englishg
     
  5. Fergal

    Fergal
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    Thanks for posting back englishg. Is the business based in the US?

    You might find this IRS page on S Corporations helpful, it provides details of filing requirements and shareholder obligations.

    Please keep us updated as to how everything is working out for you.
     
  6. englishg

    englishg
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    Yes fergal we are in the US
     
  7. Fergal

    Fergal
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    Have you been making progress on this englishg? How are things working out for you?
     
  8. seanstevens

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    If you need any further help, feel free to post back here, send me a PM or drop me an email. If I cannot directly help, I know a few people who may be able to.

    Oh, and while your online at BAF - post any other questions you might have relating to your business. There are some good people around here who would be able to offer you some excellent advice.

    Sean
     
    #8 seanstevens, Oct 3, 2009
    Last edited: Oct 3, 2009
  9. englishg

    englishg
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    I have another business question: In terms of wages, does working from home have any monetary value.
     
  10. seanstevens

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    Hello Englishg, could you clarify the question? is this in relation to your business as described above? Are trying to established if someone (or yourself) can be paid a salary for working from home?
     

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