Successful succession planning will allow you to transfer ownership or management to a business partner or successive generations; and help ensure achievement of your family and business goals.
Transferring a business to a valued partner or the next generation requires thoughtful planning and preparation. The Zinner & Co. Tax team has a wealth of experience in transitioning multi-generational, family-owned businesses by navigating through tax and operational challenges.
It is important to note that transferring the management of the business may be different from transferring the ownership of the business. For businesses that involve other family members or long-term relationships, this can be an emotionally difficult decision.
Planning must be done to ensure the business will continue to provide the owner with retirement money. This includes ensuring the accumulated value of the business stays intact after the owner’s departure.
An effective business succession plan should be considered years in advance of the planned departure of the owner. Sometimes, the exit strategy is even considered at the start of a business. If this is a family business, all members of the family should be considered in the planning, not just members who are active in the business. This can prevent later family discord.
A good succession plan can ensure you have funds in place for retirement and the business you built will continue to thrive in the hands of its successors.
A successful business succession plan will address the following:
- Transfer of management
- Transfer of ownership
- Buy/sell agreements
- Estate planning
- Business valuation
