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I've had an agreement with the Virginia company I work for to receive 1% of the generated revenue on a monthly basis. Of course that was after a long time of me being with the company (the bulk of my career). After enjoying the benefits of this agreement for about half a year, the company was sold (merged) for an undisclosed amount. The speculation is that it was sold for about 5M+. Am I entitled to get my share for this final transaction (about 50k+) or is that not considered a revenue and I'm out for good? Neither the old owner nor the new one said a word of course.

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That is going to depend on the exact wording of the agreement, but it is probable that it defines "revenue" as revenue from ordinary transactions, and excludes a sale of the entire firm.

The jurisdiction you are in (country and quite possibly state/province) may also matter.

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  • Thank you for the answer. It was a verbal agreement, which is accepted in Virginia (that's where the company was based). There was no mention/discussion of any nuance regarding the word "Revenue". It was just whatever the company receives into its bank account that month. – yazanpro May 13 at 1:14
  • I guess the question is: do you think the situation is worth pursuing from a legal standpoint, or just don't bother? – yazanpro May 13 at 1:16
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    I strongly suspect in that case that funds from a purchase of the company would not be considered revenue to the company. They are income, or more likely capital gain, to the former owner. Your revenue sharing agreement might possibly bind th new company in some way, but quite likely not.. – David Siegel May 13 at 1:18
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    @yazanpro the only suggestion that I can give is that you might want to consult a local lawyer. many will give free or low-cost initial consultations, and that might help you decided if this is worth perusing. 50k is big enough that if there is a significant change of winning it would pay to hire a lawyer. Evaluating that chance beyond the above answer would be giving specific legal advise, which we don't do on this site, even those who are actual lawyers, as some posters are. – David Siegel May 13 at 1:23
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    I see more promise in trying to get 1% of the future revenue from the the portion of the new company that does the business that the old company did. Buying a company from its owners is noting like revenue or profits capital gains or anything else to the company itself. – George White May 13 at 1:32
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I see more promise in trying to get 1% of the future revenue from the the portion of the new company that does the business that the old company did.

Buying a company from its owners is nothing like revenue or profits or capital gains or anything else to the company itself. I hope whomever you had the verbal agreement with to acknowledge that verbal contract but there should be internal company records of the payments to you and knowledge of people in accounting, etc. to back up the fact that they had been calculating any paying you per that formula.

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