Helen W
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Director wants to buy retiring directors share

Director wants to buy retiring directors share
Hello all
Maybe a basic question to some, but would be grateful for some advice. 
Valuing a business - Director A wants to retire, Director B wants to buy A's shares etc. and continue business. Both 50% shareholders'. No shareholder's agreement, yes I know unfortunate. Is the first stage commercial valuer etc.? Will I need a second opinion, as accountant has a conflict of interest by representing both directors? I am the wife of Director B.
Two companies involved, holding company (has all the assets, property (owned outright), equipment,vehicles etc. , and trading company.
Without sounding pretty naive, but, as the two directors are at loggerheads, even over one has had £1 more than the other, where do I start?
Any comments greatly appreciated.  


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By Sarah P
22nd Mar 2012 20:49

Yes, you need to get the group valued first
The accountant isn't conflicted if he acts for them both and is probably best placed to do the valuation as he understands the background. You should check though that the accountant is suitably experienced, this sounds like it could be a tricky valuation. Before instructing an accountant the two directors need to agree that the resultant valuation will be binding.

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By dreamcatcher
23rd Mar 2012 15:24

Purchase of own shares

Have you considered a purchase of own shares?

Based on the information in your post (ie retiring director/shareholder and directors at loggerheads) this would seem a reasonable starting place.  That way director B doesn't have to raise the capital to buy the shares.

I also agree with everything in the above post.

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By Helen W
26th Mar 2012 19:35

Purchase own shares

Yes this is an avenue that's been brought to our attention - would this be possible by a re-mortgage of the business property in the holding company's name?

Thank you for your input.


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By Sarah P
27th Mar 2012 11:56

Don't forget you will still need a valuation

Even if you go down the share repurchase route.

To answer your specific question, yes you could remortgage to fund the repurchase.

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