The turbulence of the business world expects us to adapt and conform, to bend over backwards to accommodate change; and yet, down the manufacturing road, the objective is quite different. In fact, it is pretty much 180 degrees opposed. The industry’s approach to value is a mathematical approach, one that checks the cost of the materials used, the price of delivery and the manforce needed to haul it. Once those numbers are in, a decision is made as to what happens next. To move into a management position an employee needs to have fulfilled certain criteria in terms of expertise, number of years in the company and education. One step at a time and both feet firmly on the ground, all the while an eye on the money, is how the employees of SC FABRICA DE BUCȘE SRL have advanced in their careers.
That same vision is expected from a legal advisor, when the sensitive process of acquiring new owners for the company is underway: nothing more, nothing less than professionalism and results, nothing else than solutions to be implemented immediately.
The concept of the company ownership transfer agreement is well-known in business law. It is the time when the new owner and the old one agree upon certain aspects that will enable the latter to retire in a peaceful manner from the company, in exchange for passing the “power of decision” to his partner. Nevertheless, even if we rarely hear about it, this type of agreement is equally important for companies in the manufacturing industry.
Most of the time, the branch of the industry that generates the most profit is “Sales”, which involves looking for new clients abroad or in the neighbourhood, establishing the price for the services and goods offered, setting the value of the goods purchased and filling up the inventory. That is the type of work that fills up the job description of the company’s administrator. And just like an efficient engine needs oil to run smoothly, all those transactions are dependent on a leading figure. At some point, most administrators or managers leave their position because they are old or because they lose interest or have a personal illness and so on.
Therefore, without managing the “ownership transfer” properly, the business is bound to lose its steady line of management. It can turn around 300 degrees and they may end up with an amateur administrator, who cannot possibly maintain the direction which was pre-established.
The company SC FABRICA DE BUCSII SRL released a statement saying: “We know how to manufacture pieces and we don’t want to interfere with fields we are not accustomed with”. Based on that, the decision of working with an attorney is nothing but the next step taken by a mature business. The fact that they included in the company’s bylaws the right of first refusal, shows that the company was serious even before starting the business. “We want the best benefit of the clientele and of the future owners of the company!”.
As always, when dealing with production, one has to deal with a lot of expenses. This may be the reason that the administrator had all the reason in the world to allow others to get involved into his affairs. But we all know that money makes the world go round and without having some financial issues, nobody would ever give up their seat at the “strategic board”. Therefore, an investor is unlikely to take over a company owned by one or two incorporators, without necessarily knowing that he also has to face with the company’s debts, liabilities and interests. So, clearing the bill with good prospects of growth is truly a favour that the old owners are doing the new ones.
Inevitably, each “ownership transfer agreement” has its own solutions. And sometimes these solutions are custom-made, as every company has its own “genetic code”, its own field, its own team of people largely influenced by the initial founders.
Having discussed with a few companies in the same industry, I did come across the first questions: Is there any reason for current founders to stay in the company? There may be two types of answers: yes, we want to continue building our legacy, or yes, we need to make sure that the income we generated returns to our family.
What is your option for deciding how to transfer ownership? We want liquidity, we want the option to pass on the assets to the descendants.
Some questions will have more complex answers (in legal terms) and it can take longer to find the best solutions, but the benefits of a well thought strategy will remain long term.
The following steps were specified in the model proposed in the described article: We are convinced that energy, knowledge, motivation and above all, the desire to fulfill a promise, are only a few identifiers for a successful company. And we find these exceptional qualities in SC FABRICA DE BUCȘE SRL.
For more information on business ownership transfer, you can visit Wikipedia.
