Corporate Law Business partner wants to buy me out

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NicoleD

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My business partner wants to buy my 50%. We are a small hair shop in a small town. We have an LLC and we are 50/50 partners. We have really no money in the bank,maybe $1500.00 worth of inventory, we showed a loss last year on our taxes after all the expenses. My question is how much should she pay me for this? We have been in business for almost 4 yrs. We have a decent client base. She said $6,000.00. I just want to make sure I am not going to regret agreeing to such a small amount. Also, do we need to send in paperwork to have my name removed from LLC or taxes,etc? Any help would be greatly appreciated!
 
Google " How to dissolve an LLC?" (but spell out). Try different but similar phrases until you find something that helps. You will have to be removed if you do not want to pay taxes and be responsible for other aspects of the business. You will regret it if and when the business starts turning a profit. Have you tried creative advertising to bring in more business? Most salons make more money selling products than they do on the actual services they provide. Provide better service than the other salons by offering herbal teas, coffee, soothing relaxing music, scented candles, make the place really different and stand out and the women will come. Sorry, got off track...so think about advantages of being a part owner, then write the disadvantages and see which list is longer. How much was your initial investment; how much inventory did you pay for or own; are you going to continue to work there and rent space? That will help you decide if the amount of money is fair. Make sure everything is spelled out when you dissolve so there will be no ugly surprizes later (like renting space). Update the forum so we know what happened and share your knowledge with others.
 
calalily gives good advice on dissolving the LLC. With regard to the valuation, you need to do your own homework as to what the value of those customers are actually worth. My guess is that if your partner wants to pay only $6,000 then your share is probably worth more. For the most part, it takes time for businesses to turn a profit and perhaps the answer is that she should pay $X now and/or a percentage of the revenues. The latter (as opposed to profits) guarantees you some return based upon the success of the venture.

Good luck to you and to your partner, especially if you end up getting a percentage of the revenues!
 
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