Seroquel overdose Overview of Business Succession Planning
Business succession planning is a subset of business law, which overlaps with estate planning and taxation. Successful business succession planning includes strategies implemented to ensure that successor key executives are ready and able to continue a particular businesses’ existence following an owner’s departure. Business succession planning (or “exit planning”) is extremely relevant to many small and medium sized businesses including: family owned businesses, professional companies and/or other similar business entities. Planning a business exit strategy is likened to executing an estate plan for a business. As a generality, a good business succession planner should be knowledgeable in the areas of both business law and estate planning.
There are many planning strategies to consider and/or implement when planning for business succession. The first planning strategy is to establish current and future goals and objectives. The second planning strategy is to establish a decision-making process. The third planning strategy is to develop a dispute resolution process. The fourth planning strategy is to identify successors who will take over the business and recognize any positions that will require additional support. The fifth planning strategy is to address the legalities of business succession planning. Such legalities include: tax implications, buy/sell agreements and other legal documents (i.e.: non-competes) that are required to transition the business to new successors. Finally, business succession planning involves the creation of a transition plan along with a timeline for executing the plan. For instance, a business owner may want to have successors take over their role in the company years before they actually leave.
Further, it is very extremely common to purchase insurance policies on the lives of the business owners to facilitate the process of business succession planning. This is the case because when a person exits (whether voluntarily or not) the successor does not always have the funds and liquidity available to buy that the exiting individual out. Insurance and an iron clad business succession agreement solves this issue.
Contact Capital Planning Law, PLLC for your complimentary consultation to discuss your estate planning, business law, probate, guardianship and/or real estate needs.