Urgent -help

HRManager

Everyone has been so helpful recently and I have one more question. Our small company is owned by two people. They are splitting up. The one owner wants to buy out the other owner and they are in the process of negotiating. A few of the employees have made a written offer to the one owner (in secret, without discussing with remaining employees). My question is, is this legal, can they do that and what do you suggest the remaining employees do if they have a desire to make an offer. Also, if it ends up with the existing owner and some employees owning the company - who has control - for example, over hiring and firing, salaries etc. I could really use some answers today if possible.

Marie

Unless they form an ESOP that includes all employees, the owner and any other investors (employee or outside) can form a partnership or corporation. Who has control would be the majority partner.

Theresa Gegen TX

I don't see anything wrong with employees offering to buy the company. The employees do not have any type of legal duty to each other to include all employees.

As for who will make hiring decisions once the transaction is complete, it may depend on who buys the company and what ownership they have in it, and what the agreement between the owners turns out to be. For example, if one employee owns a small (5%) ownership in the company, they may not be able to fire other employees without consent of other owners.

If the company is owned by people owning stock, the board of directors will usually control who the company officers are, and the company officers (which will ususally be the main stockholders in a closely held company) will make day to day decisions. A small stock holder may have no decision making authority.

As you can tell this is really fact specific depending on the nature of the transaction and the parties agreement.

By the way, How's the weather up there?

Good Luck!

Theresa in Texas