Loan as a transfer of funds and opportunities
Whereas franchisees (especially if they employ senior management) will have various exit options open to them, sole trader agents (especially those without suitable heirs to take over the business) are more limited in their choice. The obvious exit choices for sole traders without heirs are a merger and a trade sale. The problem in a [...]
Credit without sophisticated financial engineering
Many people think that MBOs are reserved for larger businesses and involve venture capitalists and sophisticated financial engineering, but this is not true. An MBO is merely a trade sale where the buyers happen to be your management or employees. Of course, this option is not available to very small franchises and agencies where there [...]
Terms and conditions of a payday loan
The only difference here for agents and franchisees could be the restrictions in planning a family succession that are placed on them by their agreement. It could be possible under the terms of your franchise agreement to pass on your business to an heir in your lifetime. Many principals encourage this option, as the advantages [...]
Choosing the optimal credit option
78On the assumption that your agreement allows you some freedom to plan your exit, we will examine the exit options available to agents or franchisees. Most franchises and agencies are small businesses and this fact, together with the fact that they are operated under licence, restricts the choice of disposal options open to them, but [...]
The role of franchise in company debt management
27There are several advantages in buying a franchise, but there are also various reasons why a franchise business is not for everyone. However, it is not the purpose of this book to examine these aspects of a franchise in any detail. Rather, I will concentrate on the important issues concerning franchising as a business structure [...]
Payday loans and company accounts
24In the example of the problem with the recalcitrant minority shareholder mentioned previously, we assumed, for simplicity, that the minority shareholder was the owner of the same class of share as the majority shareholder (i.e. that they were entitled to the same equity, voting and profit rights). One way for an entrepreneur to motivate, or [...]
Credit or agreement between shareholders?
A shareholders’ agreement is the company equivalent to the partnership agreement, which we have discussed above. It is just as important for shareholders to have agreements as it is for partners, particularly with regard to ensuring certainty in your exit planning. As a business owner you need complete flexibility on when and how to exit. [...]
The impact of taxes on your credit
The impact of taxation on the sale of shares: Capital Gains Tax (CGT) You can own shares in a company in your own name, or through a holding company, or through a nominee company. There might be trading, or other, advantages in this sort of ownership, but from an exit planning point of view there [...]
Companies limited by their debt
The basic legal concept of a company is that it is a separate legal entity from the shareholders who own it. A ‘limited’ company means that the obligations of the shareholders (also called members) are limited to the contribution they have made in purchasing their shares. In other words, shareholders of limited companies are not, [...]
Partnership agreements and payday loans
Where there is no partnership agreement, or an agreement exists that does not include a restraint of trade (or non-compete) clause, the exiting partner could be able to attract his old clients to his new business. He might then be able to sell this client base before retiring. With no non-compete arrangements in place, should [...]