Basic Training: Could An Agreement Save This Family Business?

By Nina Kaufman, Esq.

Q: I have worked for my dad for more than a decade. He recently told me he wants to stop working but says he is not retiring. He wants to be paid the same amount of money and he wants himself and his wife to keep being covered by medical insurance through the business. He said he would give me a percentage of the business–I think 10 percent at the start and then the rest in 10 years. This sounds very unfair to me and a great deal for him. I have tried to talk to him to see if he is flexible on some of these points, and he says no. I’ve tried to setup a sit-down with him to try and reason with him but he keeps canceling. Do I have any rights to any of the business since I am his son and have worked to build the business up?

A: The short answer is that without either a written agreement concerning ownership, or an agreeable parent who will transfer it, you could be in for a difficult ride. You don’t have any rights in the business (while he’s alive) simply because you are his son. While there could be a strong “fairness” argument for making you an owner because of all the time and effort you’ve put into the business, “fairness” is often a matter for the courts. And once litigation starts, there’s no guarantee how it will turn out, or whether there’ll even be a business left to take over once you’re done.

Rather than sitting down with just the family, this might be a ripe opportunity for all of you to meet with a professional mediator. Sometimes, having a neutral third party in the mix helps people act more rationally.

You deserve to be paid, protected, and prosperous. Kaufman Business Law can help get you there. Watch this short video to find out how.