re: Buying into a company (Long)

Some important questions:

1) How is the company structured? LLC taxed as partnership? LLC taxed as a corp? LLP? General partnership? Corp? S Corp?

2) Do all 11 owners own equal shares?

I'm guessing it got to 11 owners via inheritence, divorce, etc. Probably a company started maybe by your grandpa or somebody, and the ownership has split over the years.

This is not at all uncommon. I work with a lot of family businesses where one or two of the members actually run the company, and the rest collect dividend or distribution checks!

If you at some point become serious, and a couple of the members want to sell out, you will first need to get a business valuation. Depending on the company it might cost a few grand. The company pays for it. You can have them value the business as a whole, and you can also have them value a share of the business (noting that due to marketability and control discounts, the value of a share might be less than just 1/11th of the company value).

As far as financing the deal, the business setup can dictate this. You can always just individually buy interests/shares from the other family members, using your own funds. You can also have the business redeem the shares/interests. The business could use a promissory note to pay off the departing members over a number of years.

So, yeah, it can be done, it's not easy, but it can be done.