If you have your own business, you may wish to keep the business within your family or sell it, before or after you pass away. Regardless of which option you choose, careful planning will ensure the business can stay up and running. It is critical to establish new owners and identify key individuals who can assume executive and managerial duties, including family members. The overarching goal is to choose the most capable individuals to run the business. A well thought out succession plan will clarify how ownership will be transferred, establish rules for hiring, compensating and promoting family members, and specify how disputes will be resolved.
A few ownership transfer considerations should include:
Coordination between who will own the business and who will manage the business. Consideration of the best interests of the business and the owner’s family.
A few management succession considerations include:
Development, training, and support of successors.Delegation of responsibility and authority to successors.Maximizing retention of key employees through equitable compensation planning for management, family/non-family employees, and active/inactive shareholders.
At McDonald Law Group, we understand that for many American families, their small business is their livelihood. Our goal is to ensure the proper protections are secured through a concise succession plan so you and your family don’t have to worry about how to proceed with the business after the death of the owner and/or family member.
This article was provided for informational purposes only and does not constitute legal advice or establish an attorney-client relationship.