Taking a minority ownership stake in a closely held company is a common occurrence. An investor may have taken a minority stake to fund growth in the business or someone may have provided essential, non-cash services – technical expertise, sales skill, management expertise – in exchange for equity. But there are substantial drawbacks with minority stakes. The minority stakeholder may have limited access to information to the business and little or no control or influence over the ultimate success of the business. The majority stakeholder(s) may also seek to force out minority stakeholders. This program will provide you with a real-world guide to structuring minority stake investments in anticipation of the majority stake owner eventually forcing the buyout of minority stake owners.
• Structuring minority stake ownership for eventual buyout by the majority stake owner.
• How to avoid undue dispute and litigation through planning.
• Framework of law protecting minority stake owners.
• Equitable structuring of minority stake governance, information, and other rights.
• Differences between passive minority-stake owner and those who actively participate in the business.
• Valuation and buyout finance issues for majority stake owners.
• Liquidity rights for minority stake owners.
• Counseling techniques to help avoid open dispute among owners.
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