Member’s Dashboard My Account Partnership/Co-Shareholder Risk Assessment Completed by: First Name Text Last Name Email 1. Did you assess the compatibility and ethical standing of your partner/co-shareholder before commencing your business? Yes, absolutely. We undertook a careful assessment of our strengths and weaknesses, skills sets, the ethics and business track records and the value each could bring to the business. Yes, to a degree. We get along very well, have previously worked together in a corporate, have known each other socially for some time, we each have very different skills sets and trust each other. No, not really. We were introduced to each other by a common friend who felt we would be a good match. We have done no compatibility and other checking. No, I needed a partner with capital and this drove the decision. No, not at all. We are old school/college/university/work friends, go back a long way and tying up in a business seemed a good idea. 2. Did you undertake any formal background checks on your partner’s financial and personal standing, e.g. credit checks, criminal record, industry reputation as well as their personal health and well-being before commencing your business? Yes, absolutely. We did current, detailed credit checks on each other as we plan to raise considerable loan finance and credit in due course, assessed our personal financial situations and tax affairs in conjunction with our accountants, underwent full medicals and as we come from the same industry, our reputations could be easily independently verified. Yes, to a degree. We did basic background checks, disclosed our personal medical and financial situations to each other and independently checked out each other’s reputation from others in our industry. No, we have just accepted each other’s word on these issues and hope that all parties will act in the best interests of the partnership at all times. No, not at all. We did not undertake any formal background checks on each other or discuss any of these aspects before commencing business and just took it from there. 3. Do you have a shareholder’s agreement in place? Yes, absolutely. We have a comprehensive partnership/shareholders agreement in place that encompasses exit by one party, take out or buy out (buy/sell agreement) terms and conditions, further injections of funding, dilution, salaries and drawings, lifestyle demands, expectations, roles and responsibilities, key man insurance requirements, restraint of trade conditions, the basis for valuing the business, exit repayment terms and time lines. Yes, but while we have a fairly comprehensive shareholder’s agreement in place, it is highly unlikely that either of us or the business will be in a financial position to meet the required obligations in full should a number of the documented events be triggered. Yes, to a degree. We have some aspects formalised, but otherwise our shareholders agreement is very basic and general. No, not really. We only have verbal agreements on most issues, but our individual roles and responsibilities are well-defined. No, we only have key man insurance in place for directors and shareholders to cover their untimely death, but no other formal agreements. No, not at all. We have no formal shareholders agreement in place. 4. Do you assess your partnership or shareholder risk on an on-going basis? Yes, absolutely. We regularly assess all the risks facing the partnership as well as our continued commitment to the business and our shared vision in building an asset of value. Yes, to a degree. We have made some amendments to our shareholders agreement to deal with serious aspects that have arisen during the course of our business partnership. Yes, but only as a result of unanticipated situations and disputes which arose between us, particularly around the private life of my partner, which nearly resulted in our partnership breaking up and the business being dissolved. No, we do assess the external risks facing the business, but haven’t checked the partnership risks or possible changing expectations of us as partners. No, not at all. We have never assessed our partnership risk. 5. Did you consider the most appropriate legal structure for the business before commencing trading and do you have a clear exit strategy or plans for the sale or disposal of the business/your personal stake in time? Yes, absolutely. We considered all the key issues such as limiting liability, taxation, oversight, costs, ease of disposal and have a clear mutually agreed exit strategy as well as time-frames around this. Yes, we have a solid structure for the business and are confident that come the time when any of the shareholders wishes to exit the business, serious potential buyers or investors with the required funds will be found. Yes, to a degree. We were guided by our accountants and lawyers, and while we have had discussions around exit/disposal of our stakes, we have not been able to reach an acceptable agreement or consensus in this regard, particularly around valuation. No, not really. While we have time-frames in mind, we will more than likely be forced to accept any offer for the business that comes along. No, not at all. We did not consider the importance of this when we set up the partnership and went for the cheapest structure. We have no idea of how, if and when we might exit the business. 6. Does the business have suitably qualified, objective third party advisors? Yes, definitely. We make use of objective, highly reputable lawyers and accountants who have been advisors to our business since we started out and who we both trust. Yes, to a degree. We will engage the appropriate professional service providers we have mutually identified as and when the need arises. No, not really. We do not have the services of experienced advisors and rely on our accountant and lawyer who are one-man practices, but who know our business well. No, we will have to rely on business brokers when the time comes to exit or sell. No, not at all. We do not believe in advisors or consultants and prefer to make decisions and handle things ourselves. Score Score 0 to 29 Your score indicates that there is a lack of Partnership/Co-Shareholder controls and discipline that exposes your business/organisation to massive risk. We suggest that you URGENTLY address the issue of human resources expanded risk management generally, and also identify the biggest risks individually and put the necessary policies and programmes together without delay to minimise these risks. Score between 30 and 44 Your score reveals that your Partnership/Co-Shareholder controls and discipline are weak and expose your business/organisation to significant risk. We suggest you address the area of human resources expanded control risk as a priority and look to make improvements in this area as soon as possible. Score between 45 and 54 Your score suggests that there are significant potential weaknesses in your Partnership/Co-Shareholder controls and that this should receive attention as a matter of priority. While an overall improvement may be required, it is also possible that your vulnerability is limited to one or two areas. Score between 55 and 64 Your score suggests you could and should improve your Partnership/Co-Shareholder controls, but that this area probably doesn't represent a massive risk (generally). There may however be some vulnerability in a couple of areas that should be addressed in the reasonably near future. Score between 65 and 79 Your score suggests that you probably have strong Partnership/Co-Shareholder controls and are therefore probably not hugely at risk. We would however recommend that you identify possible areas of weakness and address these in due course. Score 80 and above Your score suggests that you have strong Partnership/Co-Shareholder controls and have therefore greatly reduced your risk in this area. We would however still advise you to identify possible areas of weakness and address these in due course. reCAPTCHA Submit
