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Title: Determining the indemnity of retiring SME owners in Germany, taking into account SMES' specific characteristics
Author: Stilla, Angelo
ISNI:       0000 0004 7655 6101
Awarding Body: University of Gloucestershire
Current Institution: University of Gloucestershire
Date of Award: 2017
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A shareholder's withdrawal from a small and medium sized enterprise (SME) can significantly impact the financial stability of the company. This may be because the legislator has not provided precise legal specification of how to determine indemnity, or that the compensation regulations implemented in the articles of association do not comply with existing legislative frameworks. The aim of this study is to identify the most suitable valuation method for indemnity determination when taking into account the particular, qualitative characteristics of SMEs and to develop a severance agreement for indemnity regulation that considers the interests of all shareholders, increases clarity and meets the statutory requirements. Previous studies regarding valuation, the characteristics of SMEs and indemnity determination have addressed indemnity regulation from either a legal or business administration perspective. This research however investigates the topic holistically by employing an inductive and qualitative approach through semi-structured one-to-one interviews with experts from different but apposite professions. It then offers an indemnity regulation framework that is consistent with current business research and legal boundaries. This research is hence interdisciplinary, i.e. it takes into account the most suitable valuation methods for SMEs, the interests of their shareholders in cases of retirement and the statutory provision by examining current court decisions. The outcomes contribute to theory and give practical recommendations to SME owners and consultants to enhance the fairness and transparency of the retirement process and reduce the probability of legal disputes. The study demonstrates that SME characteristics should be considered in valuation and consequently when determining the indemnity of the outgoing owner. Furthermore, the outcomes suggest that indemnity regulation is advisable and should be implemented in the articles of association. In cases where compensation regulation exists, a revision is recommended due to the potential unethicality in current statutes.
Supervisor: Afriyie, Charles ; Kruse, Oliver ; Ward, Philippa Sponsor: Not available
Qualification Name: Thesis (D.B.A.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available
Keywords: HD2340.8 Small and Medium-sized businesses, artisans, handcrafts, trades ; HG4001 Finance management. Business finance ; HG4501 Investment, capital formation, speculation