Small business owners are wise to consider business succession planning. Succession planning is planning to pass the business on to others upon the owner’s retirement or passing.
The most obvious choice for succession planning is to liquidate the business and pass the net proceeds to others.
Other owners, however, may wish that the business survive as a family business. In this case, the most obvious consideration is: who should assume the business operations? Options are family members, employees, other professionals, or others. The mere act of identifying the successor removes much difficulty at that time. The owner might choose to provide guidance to those assuming control. One particular form of guidance might be guidance with respect to satisfying any debt that may exist. This might be done by identifying assets most appropriate for liquidation to pay debts.
Recently enacted tax laws have reduced the tax effect of transferring a business to successors. Nevertheless, planning may be necessary to take full advantage of these tax provisions.
A succession plan must be reduced to writing. Consult an experienced attorney to prepare the necessary documents.
With a succession plan in place, a business owner can take satisfaction in knowing that his or her hard work will survive the owner’s departure from the business.
The most obvious choice for succession planning is to liquidate the business and pass the net proceeds to others.
Other owners, however, may wish that the business survive as a family business. In this case, the most obvious consideration is: who should assume the business operations? Options are family members, employees, other professionals, or others. The mere act of identifying the successor removes much difficulty at that time. The owner might choose to provide guidance to those assuming control. One particular form of guidance might be guidance with respect to satisfying any debt that may exist. This might be done by identifying assets most appropriate for liquidation to pay debts.
Recently enacted tax laws have reduced the tax effect of transferring a business to successors. Nevertheless, planning may be necessary to take full advantage of these tax provisions.
A succession plan must be reduced to writing. Consult an experienced attorney to prepare the necessary documents.
With a succession plan in place, a business owner can take satisfaction in knowing that his or her hard work will survive the owner’s departure from the business.
