I recently became a shareholder of a limited company accountancy practice . I had to pay for my shares and in return I get paid for the work I do plus a dividend based upon the perfromance of the business. The only other shareholder is the owner and in buying my shares I have effectively paid him for a proportion of the goodwill he has generated since strating the practice many years ago. One thing that concerns me, however, is that he is approaching retirement whilst I am fairly young and I would imagine that over the next 5-10 years I will generate a lot more new business than he will and, as things currently stand, if I were to then buy some more of his shares I would effectively have to pay him for my own clients which seems grossly unfair to me and offers little incentive for me to work my socks off trying to grow the business.
I would be greatly interested in hearing from anybody that finds themselves in a similar situation or from anybody that can offer suggested solutions to this problem.
My 'partner' for want of a better word is reasonable and I am sure if I made a suitable proposal he would be open to discussing it. I would imagine that this must be an extremely common issue in our profession and I am hoping that there is a typical solution.
Thank you in advance to all who can contribute.