Business Succession Planning
For small business owners and entrepreneurs, preparing for your eventual passing also includes what you want to happen to your business. In many cases, the business already is or can become a family-owned business, assuming that there are family members or adults who wish to continue running it. In others, the business owner may have a partner who already owns a share of the business and wants to continue managing its operations.
There are several factors that can affect the decisions you make and how you handle the succession planning. These include:
The type of company.
Depending on how your company is set up, it could be classified as a corporation (either an S-corp or a C-corp), a limited liability corporation (LLC), or a partnership. Depending on which type of company you have ownership in, succession planning would be handled in a specific way to make sure your needs are met.
Your role in the company.
As an owner or part owner, you may be deeply involved in the day-to-day operations of the company. Or, you could just be an investor who owns a share of the company, which you acquired in exchange for start-up money. To make sure the future of the company is guaranteed, succession planning is an important step to take.
Let’s say you are a 50 percent partner in your company and both you and your business partner are equally involved in the work that you do. If you should pass away, it’s important to have decided what will happen to your 50 percent of the company. Do you have an heir who works for you and wants to stay involved and retain ownership of your share? Do you want your partner to buy out your share of the company from your estate? Is your business partner in agreement with your planning? These are important issues to resolve in advance.
By taking care of your business succession planning, you will make your passing much easier for your family and your business partner or partners, as well as for your employees, customers, and clients. As your attorney, my role will be to make sure that your wishes and the wishes of your family are honored after you pass.
At Nexus Legal Solutions, an initial consultation is always free and informative, and is a service we’re happy to provide. For more information, please call 407-900-7722. Or visit our Contact Page and we’ll get back to you as quickly as possible.