A relationship breakdown, especially where children are involved, creates trauma and it can also put strain on your small business.
It seems many SME owners must cope with a breakdown annually. Family Business Australia research shows there are more than 1.4 million family businesses in Australia. Meanwhile, the Separation Guide shows a 314% increase in the number of couples considering a separation during lockdown, of whom many presumably own an SME.
Play on or sell up
Craig West, the founder, and chief executive of Succession Plus, a business succession, and exit planning firm, says if the business is managed well, it should have a “shareholder agreement” covering the eventuality of a personal relationship breakdown between business partners. A shareholder agreement also covers other aspects of the business, including its funding, structure, management and direction, the responsibilities and obligations of the owners, and exit planning.
West says the shareholder agreement should also include a buy-sell clause to cover the situation where one of the partners wishes to sell their share of the SME. “The shareholder agreement will describe what happens if someone gets hit by a bus, gets divorced, or gets seriously ill,” he says. Yet he estimates that only 20% of SMEs have shareholder agreements.
This story is from the October 2021 edition of Money Magazine Australia.
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This story is from the October 2021 edition of Money Magazine Australia.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
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