Dividing business between family members

Mojisola

npswf14 wrote: »

Well that's a difficult one! Ambitious in a good way but there also an element of the twenty something " I know everything" to him ( he's 23, I'm 44)

In that case, I would give him more control in stages so that you can encourage his good ideas, keep a rein on what you're not happy with and still have ultimate control - until you're ready to hand over to him.

Make sure he gets plenty of recognition for his good ideas.

Mistral001

npswf14 wrote: »

Thanks for all your replies. My Nephew has worked with me for 6 years and has helped to grow the business. So my plans are to recognise that and bring him formally into the business as a director.
The other employee has only been with us a year.

Are you worried that he already has a claim on your business? It is unlikely to happen but if you had a fall out and sacked him he could perhaps make a case that because he helped build the business he is entitled to part of that business when leaving. Legal and accountancy advice obviously required.

On a more general point, I think people only turely learn how to run a business and take responsiblity when they learn from their mistakes. That is the difference from an employee and an owner of the business in my view. Employees when they make a mistake and it is not big enough to get the sack for doing so, will get a "rap over the knuckles" and might or might not learn from their mistakes, but an owner feels it in the pocket and that is a big learning experience.

heretolearn_2

" It is unlikely to happen but if you had a fall out and sacked him he could perhaps make a case that because he helped build the business he is entitled to part of that business when leaving. "
never heard of that in my life. employees have no ownership rights whatsoever over their employers businesses!

npswf14

...so what would be the general feeling on the initial share split? 20:80 ?
Also any thoughts on dividends and how I could share some of the (small) profit with him to reward his efforts? Thanks again guys any advice experiences very welcome