SELLING MEMBERS INTEREST BUT CONTINUING TO WORK FOR CC

[Roxanne]

Some advice please: I currently own 20% members interest in a cc - which I was given. Come end of July I am leaving the cc to free up time to pursue other interests. I have been asked to stay on as an employee with a small portfolio for which i will earn a monthly salary. We need to work out the value of my portion of the members interest. It was mentioned that either I stay on and earn the salary or i get paid out the value of my members interest - IT CAN'T BE BOTH. This doesn't make sense to me. Is this standard procedure?

[Dave A]

I don't know about "standard", but it certainly isn't unusual.

In broad terms, the CC structure is built around active involvement of the members in material decisions.

[BusFact]

Thats their rules or starting point in the negotiation. Its not necessarily standard, but as Dave said, not unusual.

My view is that they are two separate value sources. One is your share in an asset (the cc) and if you sell that share you should get payment for it. The second is the salary which is payment for work done for the company. You could get both, or just one. Thats between you and them to decide.

But do you really care what they call it? Decide in you head what you would have wanted for the interest and simply add that to the salary you demand, spread out over several months. Then choose just the salary option. So you end up getting paid for it inyour mind and they should be happy because they didn't pay you for the interest.

There are a whole lot of ways this can turn out. You guys just need to decide amongst yourselves. Negotiate.

[Roxanne]

Excellent. Thanks for the feedback. Makes sense. I will work on what works for me. As the saying goes, "you never get what you deserve. You only get what you negotiate". Appreciate it.