Business Succession Planning
Why you need a Business Succession Plan
You and your partners have worked hard to build up your business so you will want to make sure it can withstand whatever life throws at it. The most valuable asset your business has is yourself and your business partners.
A Business Succession Plan is more than just having a partnership agreement. It's about having the right assets end up in the right hands at the right time, tax effectively.
Most businesses are not succession ready so it is important that owners plan for business succession properly.
When a business partner dies, it can be a shock for them to find they are suddenly in business with their partner's spouse, brother or sister, bank, or their partner's trustee in bankruptcy. Furthermore, if proper succession arrangements are not in place, the worth of your business asset could be reduced or wholly eroded through a forced sale and family dispute. Alternatively, it could be locked up in the business at the whim of a partner unable or unwilling to purchase the share for fair value.
What you need to do
To properly plan for these events you should:
- have a shareholders or partners deed that explains how business partners come and go;
- have a buy/sell insurance arrangement to fund exits at agreed values;
- insure your revenue if you happen to lose Key People that have key skills or are key revenue generators;
- pay out business debt to release any loan guarantees or personal security you or your associates may have given;
- ensure your Wills and Powers of Attorney are properly drafted to allow for succession of ownership and control; and
- ensure your estate planning takes into account any potential for family disputes or contest for control of the estate business.
The benefit of tidying up these matters now is an investment in avoiding potentially costly disputes in the future.
How we can help you
We offer an obligation-free meeting which provides an overview of our service and an initial assessment of your Business Succession Planning needs.