Our attorneys provide business succession planning services to assist clients in planning for the transition of ownership and control of family-owned businesses. Appropriate technologies are utilized to enhance our clients’ understanding of succession planning strategies and to enable cost-effective delivery of these services.
Business succession planning is among the most important -- and perhaps most difficult -- issues facing family-owned businesses. Studies show that more than 50 percent of such businesses lack business succession plans, and more than 70 percent of those will not survive the next generation. Simply stated, choosing a successor is an enormous decision. Our business succession planning services can be of great assistance with this process to ensure the efficacy and sustainability of a company in to the future.
We have extensive experience in business succession planning by helping clients transition ownership and control of family-owned businesses. Our attorneys have the knowledge, tools, skills, and insight necessary to enhance the client's understanding of business succession planning strategies, and to develop a sound plan that appropriately addresses the many complex financial, tax, personal, and estate planning issues related to such transactions.
Some business owners do not begin the business succession planning process because they wrongly assume that they will need to give up control of the business. Others are not sure of how to divide their estate, especially when the business is their largest asset, and only one of their children is the potential designate to take over. Also, there is often the question of family conflict related to business succession planning.
Business succession planning, however, can create peace of mind. It also protects unprepared family members from decisions connected with owning, selling and managing the family business. Taxation issues are another important reason to plan for a logical wealth transfer utilizing business succession planning. A well-prepared plan also gives business owners an opportunity to express their personal vision and goals for their company. In addition, liquidity enables the owner to retire leisurely while perhaps pursuing other ventures.
Some of the issues to be considered in business succession planning are as follows:
- An heir apparent
- The role of family members in the business and your family's financial dependence on the business
- The long-range plans and goals for your company
- Timing for transferring ownership and control
- The future involvement of senior managers and long-time members of your company
- Cash flow needs
One option for transferring ownership is to bequeath it to a member of the family, while other options include Employee Stock Ownership Plans (ESOPs) or, installment sales and management buyouts. The key in all of this discussion is that the business owner receives tax and legal advice from skilled attorneys to ensure successful succession planning.