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Most owners of closely-held, medium-sized companies
have between 30-to-90 percent of their personal net worth invested
in their businesses. Until about ten years ago, business owners
had one of two choices relating to their business assets: keep or
sell. If they wanted liquidity, they sold their company. If they
wanted to keep their company, they remained illiquid.
To those owners who are wondering whether this is
a good time to sell their entire ownership interest, we say, "yes".
There is plenty of buyout capital available and recent credit tightening
has been loosened. The impact of economic turbulence, which had
driven-down prices from the historic highs of a few years ago, has
eased during the past year. In fact, the combination of historically
low capital gain tax rates and today's higher prices being paid
by buyers have made this an opportune time to sell. There are also
today a wider range of partial-liquidity options. Many funds will
purchase a minority interest in a business. This can provide partial
liquidity to an owner while maintaining control over the business.
For more information on obtaining liquidity from your
business holdings click here.
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