BUSINESS SUCCESSION PLANNING
Updated: Oct 7
You’ve worked hard to build your business. But what happens to your business when you’re no longer around, whether that’s because of retirement, incapacitation, or death? It might be unpleasant to think about such things, but developing a plan to transition your company following your wishes doesn’t have to be a long, tedious process.
Preparing for the Unexpected
You maintain adequate insurance, you’ve managed to create a healthy cash flow to protect and nurture your business, you’ve reaped the benefits of successful marketing, and you’ve hired the right employees - all important steps in the daily operation of your business. But there are important simple steps you can take now to protect your family and your business in the face of unforeseen events such as medical emergencies, incapacity, or death. Those steps include estate planning and implementing some strategy into your business succession plan.
Protecting Your Interest
Your business may be the most valuable asset you own and needs to be covered as part of a comprehensive estate plan. Call Schmidt, Kirby & Sullivan, P.C. to speak with an attorney about drafting a Revocable Trust Agreement, the most versatile, comprehensive tool available for ensuring your assets are managed and distributed as you desire. Getting your business assets and other property into a trust allows a trustee of your choosing to handle these assets promptly as you set forth, rather than allowing the court system to dictate decisions concerning your business you have worked so hard to build.
Implementing Strategy Into Your Plan
Your inability to make decisions for your company may be temporary, such as being unreachable while on vacation or laid up in the hospital for a few weeks requiring surgery. Who will pay the business expenses to ensure your business continues to run smoothly while you are gone? Would someone be able to access company bank accounts to see that these payments are made? A key strategy to make sure you are covered in such situations is to identify and train a key employee to operate as your successor in your absence. Ideally, you would have such a plan in place before you open for business, but this may not be realistic. However, you do not want to wait too long to begin planning for unforeseeable events. These plans should be reviewed periodically and updated if needed.
You may have partners in your business. It is important to discuss your business’s succession plan with your partners and come up with a plan in case one partner passes away unexpectedly. Our firm can take steps to ensure you have the proper business planning documents in place so that you’re covered for such an event. Such documents might include Buy-Sell Agreements, Shareholders’ Agreements, LLC Operating Agreements, etc.
A Buy-Sell Agreement is important when there are multiple owners of a company. Such an agreement will outline how the transition of ownership interest is to be handled in the event of your death, incapacity, or retirement.
Get Started With Your Business Succession Planning Today
Our attorneys at Schmidt, Kirby & Sullivan, P.C. can help you tackle the “what ifs” and “what happens if worse comes to worst.” You have worked hard to grow your business. Now take steps to make sure it is in good hands when the time comes that you are unable to be actively involved. Spending an hour or two with one of our attorneys, you will achieve peace of mind and gain a sense of security by developing a plan for the growth of your business into the next generation.