Five Reasons to Consider How to Maintain Ownership of Your Business

Obviously, the owner does not create a business in order to pay or not pay taxes. Although the tax officials have a different opinion in all seriousness. In addition to all those issues that we have already discussed in previous issues, the business owner is full of routine things that need to be thought about in parallel. And among them are management risks and asset protection.

According to statistics, corporate disputes over the past seven years have grown by almost 20% annually. The bulk (over 70%) is provided by small and medium-sized businesses. Simply because many do not know how to negotiate.

In business customs, at best, to negotiate the terms of “entering the topic” – slapped hands, washed, and then the war will show the plan. But it rarely comes to systematically defining the scope of responsibilities, securing areas of responsibility, exiting a business, discussing issues of inheritance of shares, etc. We often see conflicts smoldering for years. And when it comes to a spark, instigators will also appear to decide everything through the courts – lawyers and attorneys who make money on it.

But do not forget: a conflict between partners in 50/50 shares does not have judicial protection (the court will offer you either to liquidate the business or buy out each other’s share), this time. And secondly, the judicial outcome of the conflict in 35% of cases is bankruptcy.

What are the key points in terms of management risks?

The first is the transfer of the owner to the strategic level – “going out to the astral plane,” as we call it. Sooner or later, for various reasons, the owner wants to get away from operational management. Someone is more like reading books, fishing for fish or moving to the seas.

The desire to enter the astral plane is followed by the desire to decentralize business while maintaining ownership control. But if you step aside from operational management, you need to decide who will take care of it for you. And for what strange reason this person will rip on his shirt as zealously as you do.

The second is the transparency and manageability of the business. First you need to understand what your business is. As practice shows, the owners of their business reliably represent 70-80%, everything else is wishful thinking, passed off as real. Which, in principle, is the norm.