Best practices for agreeing for a minority share for the seller?

by a searcher from Henley Business School

3 years ago

Any experiences of successful arrangements with the seller keeping minority stake from the target company? What to be considered?

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18 comments

professional from University of California, Berkeley - Haas School of Business

Make sure they/you have a clear understanding of what activities/projects/duties/responsibilities/authority they will have and how much time they are required to be involved in company related business

11 months ago | like reply | 0 likes

intermediary from Columbia University - Columbia Business School

many complexities to consider - economics, governance, employment agreement as applicable, subsequent take-out or sale mechanics (put/call), how to treat future capital needs or subsequent transactions, etc. Tax treatment is a common trip-up for both buyer and seller, particularly as the split dips below 80/20, so be sure each party consults with competent M&A tax legal counsel

3 years ago | like reply | 1 like

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