Opening your own business is an exciting opportunity, but it is also one that requires thought about things that will happen long into the future in an ideal situation. Most people find themselves suddenly grappling with the problems of a business succession plan far too late. Putting their loved ones in the difficult situation of trying to figure out what to do with the company, and even whether they are legally empowered to take action with that company without all of the tools and implements necessary. Thankfully, doing some advanced planning with the help of a planning lawyer can give you a great deal of peace of mind and also provide clarity to your loved ones in the event that something suddenly happens to you.
There are six critical elements of a powerful business succession plan that enables everyone in a power position to make the crucial decisions required when someone suddenly becomes disabled, wishes to exit the business or suddenly passes away. These six elements include:
- Beginning the planning process as early as possible even before the business owner has a clear idea for the exit plan.
- Structuring the plan with some flexibility to allow to evolve or change
- Bifurcating equity in control
- Diversifying the planning techniques used for the future of the business
- Transferring any tax savings
- Incorporating non-tax factors such as family harmony when the exit plan does include some family members but not others.
The right business succession planning lawyer is a strong advocate for the rights of the business owner as well as for the future of the company when engaged early.