Case study 3 - Resolving a partnership dispute.
Seeking professional advice at the outset is essential.
The client, two brothers in partnership, operated as motor dealers. The business had been passed down to them by their father. A dispute arose mainly about the differing commitments shown by them and they approached their accountant to seek advice on how this could be resolved.
The accountant interviewed both brothers separately and together and it was eventually agreed that the younger brother would acquire the share of the business held by his brother.
A structured plan was devised whereby the disposal was eligible for retirement relief, which effectively reduced the purchase consideration to both brothers satisfaction. In addition, the elder brother was paid a small retainer as a consultant to the business, being a qualified mechanic, and his 'golden handshake' was paid into his pension fund.
As a result of consulting their accountant, an acceptable solution to a family dispute was quickly defused and the business carried on operating.
Family disputes can be very divisive but seeking advice early saved much potential anguish and uncertainty.