If your employer has told you that they plan on expanding the business and they want to know if you would be interested in buying in to become a shareholder or part owner, you'll want to contact a business lawyer before singing any paperwork. You'll also want to meet with a business auditor to make sure that it's worth investing the money in the expansion of the business. Here are a few things you'll want to talk with a legal professional about and that you'll want the lawyer to focus on when creating the sales agreement.
Voting Shares
Will the shares that you buy be voting or non-voting options? If you can't vote and you don't have any say in what goes on with the business, it can be a problem if you don't like the way things are being ran. See what percentage of the shares you can get with voting power to make sure that your voice is heard if you are investing money.
Potential Buyout
Will you be able to sell your shares to anyone if you decide that you don't want to be an owner anymore? Or will you need to sell the shares to someone that is already a owner of the company? This could determine when you can get out of ownership or when you can profit off the shares you bought into.
Cost to Buy In
Your business lawyer can have a business appraiser asses the business and the potential earnings from expansion. Then they will determine what the shares of the company are worth, so you can offer a price for the shares. You want to make sure you don't spend too much to buy in, because if the company goes under or you have to sell, you want to recover some of your money.
Don't just pay whatever the current owner wants you to pay, and don't buy into a business until you get some legal advice from a legal professional. Although you may be ready to take some ownership in the company, and you are ready to start planning for your future, you need to make sure you're making a good financial decision and that you'll eventually see a return on the investment that you make. It may take some negotiations for you to agree on a price and the terms when you sit down with the current owner and your lawyer.
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