I think we all agree we want things to run smoothly in our personal and business life. Even in our daily commute (remember those days?).
However, some things in our daily lives are beyond our control because they occur unexpectedly. Unexpected they may be, but most can be planned for. We plan for family events, vacations, retirement etc. But for many business owners, work and all the daily problems get in the way of a regular review of plans for an inevitable change of ownership.
How that change might occur is worth considering. Will it be orderly and smooth or will it be time consuming and costly for all concerned?
Here are six points we ask our business clients:
1: Who will run the company when you eventually retire?
2: What plans are there for the next generation of ownership. Will it be family or select employees? Or is a sale to a third party contemplated?
3: If family members are not in the business, is an Employee Share Option Plan something that might be attractive?
4: When did you last fully review your “Business Will”; your Shareholder Agreement / Buy Sell agreement?
5: How are you going to be paid for the value of your interest in the business when you retire, or in the event of an unexpected disastrous health event, or sudden death? Where is the money going to come from?
6: What plans have you made to creditor proof your assets?
The conversation often turns to planning for these events to be handled smoothly so the business can continue on. What type of structure will be used?
The skill of successful succession planning is ensuring that, as best as possible, there is an orderly and tax efficient transfer of ownership from one generation to another.
Resolving an unprepared transfer of ownership takes a lot longer than an annual review of a “Business Will”.
To arrange a free review of your Business Will go here