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Phillips Esq.
Phillips Esq., Attorney-at-Law
Category: Legal
Satisfied Customers: 18837
Experience:  B.A.; M.B.A.; J.D.
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My business partner wants to buy out my shares. My cousin is

Customer Question

My business partner wants to buy out my shares. My cousin is our other partner and actually he'd like to buy my cousins as well. He made an offer which I believe is not only insulting but also ludicrous. In it he says the work done to my car recently that he paid for out of the company money brings the price of my shares down and the rental car he paid for also should come out of what I should get for my shares. He also included in his offer a clause that says I won't go in to the business or speak with any customer or employee and that he can use legal means to enforce that. I'm thinking that personal expenses that he paid for as he routinely did in the course of our relationship shouldn't suddenly have anything to do with business or make my shares in the company worth less. If anything, I think he owes the company that money since he misappropriated those funds. I am happy to serve a copy of his offer for you to review. If you're in the mood for a good laugh. Can you give me any kind of guidance so I can counter without looking as dumb as he thinks I am? I'm a quick learner but I have no background in corporate law which he knows, obviously. Thank you.
Submitted: 10 months ago.
Category: Legal
Expert:  Phillips Esq. replied 10 months ago.

You need to make a counter offer based on the fair market value of the business. If you have not already done so, all partners may get a company that appraises business to appraise your business, or you can determine the business worth from revenue and assets and liabilities of the business and then figure out what each partner's share would be based on your partnership agreement.

As for the non-compete/non-solicitation clause that the partner is putting in as part of the buyout, that is generally a common provision in this kind of transaction. However, the provision must be reasonable and not too restrictive in a way that prevents you from making a living. That means that it must be reasonable in scope and duration. Two year restriction is generally found to be reasonable.

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