Business succession planning is a series of logistical and financial decisions about who will take over your business upon retirement, death or disability. To write a succession plan, the first step is to identify the ideal successor to take over the business, then determine the best-selling arrangement. This usually involves a buy-sell agreement, secured with a life insurance policy or loan.
There are 5 common ways to transfer ownership of your business:
Why It’s Important to Write a Succession Plan
Succession plans are commonly associated with retirement, although they also serve an important function earlier in the business lifespan: If anything unexpected happens to you or a co-owner, a succession plan can help reduce headaches, drama and monetary loss as your business grapples with a transition.
A succession plans makes it clear who will take over the business, reducing any potential disputes between parties. If a purchase is involved, the sale price and purchase terms are also clearly outlined, relieving some of the stress for the departing owner’s family.
In other words, a well-crafted succession plan aims to benefit everybody— the departing owner, their family, the business and the successor.
This website is for informational purposes only. Using this site or communicating with the Law Office of Katherine D. Black through this site does not form an attorney/client relationship. This site is legal advertising.
Copyright © 2018 LawLawyerTemplate - All Rights Reserved.