Closely held family businesses come in a variety of forms and sizes. Some businesses are small, with only a handful of employees. Others can be quite large even though they are ultimately controlled by a single person or family. In either case, there are times when it is necessary to plan for the future.
If you own a small business and are unsure of how to prepare for when you are no longer willing or able to run it, a dedicated trusts and estates attorney could help. Let an Orange County business succession planning lawyer review your options and advise you about your possible steps moving forward.
What Are My Succession Options?
When it comes to closely-held businesses, there are generally two options available to the owner regarding succession planning. The first option is to allow the business to pass on to a family member—either through inheritance or through a direct transfer. The other option is to sell the business during the course of the owner’s life.
Many business owners choose to keep the business within the family. There are different approaches that allow for that option. Some companies stay in the name and control of the founder until they pass away. At that point, the business will be transferred according to their estate plan. There are risks with this approach, as a business could be in limbo during the probate process.
Other owners choose to complete the succession process during the course of their lifetime. Handing over the business to a child or other relative is a time-honored tradition, but it is also one that is best done with the assistance of a local attorney.
In some cases, the ultimate fate of the business is decided by an outside sale. Many businesses are sold to competitors or other individuals outside of the family. This process allows the owner to walk away with compensation for their years of hard work.
Important Considerations for a Succession Plan
There are many important considerations when developing a plan to pass on a business. A lawyer familiar with business succession planning could help an owner take those factors into consideration.
How to Exit a Company
One of the most important decisions a business owner faces at the end of their career is how they will exit the company. The answer to this question depends on the circumstances. Some people decide to resign as the owner but remain in an advisory role. Others choose to walk away from the business entirely.
Protecting Business Assets
The death of a business owner or the transfer of ownership in a business can have unexpected consequences. Some states, as well as the federal government, have an estate tax that could bring about serious tax complications after a business owner’s passing.
Will This Plan Avoid Unnecessary Disruption?
One of the benefits of succession planning is avoiding disruption. By putting a plan in place, it could be possible to continue the business operation like normal even though it has been transferred to a new owner.
Reach Out to an Orange County Succession Planning Attorney Today
Most people take pride in the businesses they have spent their life building. More than just a way to make money, your business represents years of hard work and sacrifice.
It is understandable to want to protect what you have built and save it for future generations. Call our law firm to schedule a consultation with an Orange County business succession planning lawyer who could help you do just that.