Creating a Business Succession Plan
Jan. 23, 2022
As a business owner, having a succession plan is crucial to ensure the continued operation of your company, especially when you're no more. A business succession plan allows you to create a plan for the smooth transition of your business and company's assets to another person following your retirement, disability, or death. An experienced Florida estate planning attorney can guide you through the process of creating a succession plan for your business and help you navigate intelligent decisions.
At Eric H. Light, P.A., I have the experience, diligence, and expertise to advise and guide clients through the complexities involved in creating business succession plans. I'm available to discuss your unique situation and enlighten you about the benefits of a business succession plan and what the succession plan should include. Whether you're developing a succession plan for a privately owned company or family business, I can offer you the proper guidance and brilliant advocacy you need to make informed choices. My firm is proud to serve clients in Boca Raton, Florida, and nearby communities.
Why a Business Succession Plan Is Important
Succession planning is the process of creating a feasible plan for someone to own or continue running your business after your retirement, sudden incapacitation, or death. Here are some reasons why you should establish a business succession plan:
It allows you to identify and develop new leaders for your company.
It helps prevent the wrong person from taking over or managing your business.
It allows you to have an active and participatory role in choosing a business successor.
It allows you to craft a business strategy in case you become disabled or die.
It enables you to replace key stakeholders when required.
It allows you to provide necessary information on management and repayment of business debt.
It helps you outline detailed instructions regarding how to manage your business operations.
It helps mitigate any negative impact of your departure on the company.
It helps you to provide instructions regarding the distribution of wealth among beneficiaries and heirs.
Business succession planning allows you to transfer control of your business to another person seamlessly. An experienced attorney can enlighten you about the process and types of succession plans to help you make decisions that are consistent with your business goals and values.
Types of Business Succession Plans
Below are some of the most common types of business succession plans:
Selling your business to a co-owner
Passing your business on to an heir
Selling your company to a trusted employee
Selling your shares back to the company
Selling your business to an outside party, such as a competitor or local entrepreneur
The business succession plan must contain documents that indicate who, how, and when your business will pass to another person or entity. A knowledgeable lawyer can enlighten you about the essential documents to include in your business succession plan.
What the Succession Plan Should Include
A business succession plan should include:
Written instructions about the events that will prompt the succession or specific dates you want the transition to happen
A list of possible successors, including each party’s strengths, reasons for the recommendation, and order of consideration
A realistic valuation of your business – including the valuation method employed – to enable accurate planning
Standard Operating Procedures (SOPs) including the collection of documents, methods, procedures, employee handbooks, and training documentation
Detailed information about how the business succession will be funded
An experienced attorney can help craft a unique business succession plan that suits your business goals and values.
How Legal Counsel Can Help
If you intend to pass on your business to your children or dependents, it's never too early to start drawing a plan. A detailed business succession plan can allow smooth business transition, enhance business values, minimize taxes, and help all stakeholders achieve peace of mind. A skilled estate planning attorney can explore your available legal options and help determine the best course of action.
Here at my firm, Eric H. Light, P.A., I'm dedicated to offering experienced legal guidance and reliable advocacy to clients in legal matters of business succession planning. As your legal counsel, I can evaluate your business's value, assess potential threats, and outline strategies to mitigate possible risks. Also, I can help prepare the necessary business succession documentation and guide you through the process of choosing the right business successor.
Contact Eric H. Light, P.A. today to schedule a simple consultation with a knowledgeable business succession planning attorney. My firm is proud to serve clients in Boca Raton, Florida, and nearby areas.