What is Business Succession Planning?
Business succession planning refers to the process of determining will happens to a business once its current owners and managers leave the company. A good business succession plan should not only take into account voluntary retirement, but should also plan for what will happen in the case of unexpected death or incapacitation. By putting these plans and legal documents in place ahead of time, you can avoid the stress of scrambling to make sure that your succession works smoothly when the time comes.
A business succession plan should consider how the ownership and the day-to-day operations of the company will be dealt with.
Ownership side: Handled primarily through estate planning documents and ownership transfer agreements, though it is also important to make sure that the company’s governing documents allow for your planned transfer. This transfer can be made to another owner, an heir, a key employee, or an outside party.
Management side: Business succession planning is done through corporate and management contracts and strategies. Generally, these types of plans should involve a transition or training period that begins well in advance so that your chosen successor can be prepared to take over when the time comes.
Ideally, you want to have a business succession plan in place three to five years before it will take effect. Since there is always a possibility of the unexpected occurring, making a business succession plan should happen even earlier, if possible. This will give you and your business time to implement a smooth transition that doesn’t leave everything until the last minute.
Protecting Your Legacy
One of the most common concerns that business owners have is what will happen to the business that they have worked so hard to grow after they pass away. With proper business succession planning, you can put everything in place for the next generation and leave those worries behind you.
It is not enough to merely set out your wishes for succession in your estate plan. In many cases, a company’s operating agreement and other corporate documents may not allow for such a transfer, even if this was not the intentions of the owners.
At Bailey Law Firm, we take a multifaceted approach to business succession, ensuring not only that your interests are granted in your will or other estate planning documents, but making sure that your company is set up so that the transfer goes smoothly.
Through management succession planning and gifting of ownership interests, we can help you plan to hand over the reins of management and ownership prior to passing.
We can also help you plan for the worst. Due to the fact that it is unwanted and unplanned, businesses often ignore the possibility of their owners or managers becoming incapacitated and unable to make decisions. Although it can be hard to face, it is important to put documents in place that will make sure your business is able to operate properly in the event that this does occur.
Understanding Individual Needs
Bailey Law Firm has experience in both in estate planning and in corporate law, making us ideally suited to prepare a comprehensive business succession plan. Many law firms may be able to provide one aspect of a good succession plan, but we are uniquely suited to protecting your interests from both perspectives.
Together, we can create a business succession plan that meets your wishes, objectives, and needs to provide peace of mind for you and your business, whether large or small.
Our attorneys also are experienced in assisting family-owned businesses of all sizes and assuring continuity as they transfer their business interests to the next generation. By making sure that ownership and management transfers are not left to chance, we can help you make sure that your business continues its success for years to come.
Business Succession Services
• Limited Liability Company, Corporation, and Limited Partnership Documents
• Medical Power of Attorney, Living Wills, Durable Power of Attorney
• Management Agreements
• Ownership Transfer Agreements
You have worked hard to grow your business, so it is important to know that it will continue to provide for those that you care about once you are gone. Whether you need assistance making a plan from the ground up, or if you already have a business succession plan in your mind that just needs to put into practice, the attorneys at Bailey Law Firm can help. Contact us for assistance with your business succession plan to make sure that your legacy will be protected for years to come.