As a successful business owner, you've worked hard to get where you are today, and if you're like most of our clients, you may hope that the company you've built is strong enough to continue on when you're no longer there to run it. However, if you want your business to outlast you, having a business succession plan is crucial – as is having it ready to go well in advance of any need.
Have you given any thought to what would happen to your business if you became disabled, retired, or passed away? Planning for incapacity or death can help ensure your business continues to thrive in your absence. Here's what you should know about business succession planning and how the highly-skilled attorneys with MacDowell Law Group can help you protect your business and its future.
Inside Your Business Succession Plan
Essentially an estate plan for your business, a business succession plan provides instructions for transferring business assets to the next generation, partners or employees, or third-party buyers. The plan can be implemented after your retirement or death or if you're forced to step away from the business prematurely due to poor health or other circumstances.
Succession plans can be as unique as the businesses they're made to protect but typically address issues such as tax planning, strategic movement of assets and real estate, management of the transfer of assets to employees or new owners, strategic gifting, and asset protection and restructuring. A robust business succession plan will also:
- Include information on the anticipated timing of execution
- Provide instructions for implementation
- Address the value of the business
Working with a knowledgeable and experienced Virginia business attorney is the best way to ensure that your business succession plan includes and does precisely what you want it to do.
Choosing a Succession or Exit Strategy
What's in store for your business? If you could look into the future, what would you like to see? Would you hope to see the business run by your heirs, current employees, or business partners? Or could there perhaps be an as-yet unknown third party in your business's future? Your decisions will inform your choice of successor or exit strategy. Common strategies include:
Transferring business ownership to family members or other heirs.
This can be an ideal solution if you have trusted members of the family who are both willing and able to take over.
Selling the business to a partner or an employee you've groomed for an ownership role.
If you own your business with someone else, your partnership agreement may include an exit strategy that allows you to sell your share of the business to a partner or other party.
Selling the business to a third party.
If you're the sole owner of a business and don't have any family members or employees who you could trust to be reliable successors, selling to a third party may be an advantageous option.
Closing and liquidating your business.
If you can't bear to have someone else run the company you built, or if you're unable to find a suitable successor or buyer, you may opt to permanently close the business when you retire or have your family (or personal representative) close it after your death.
Do You Need To Speak With An Experienced Business Attorney?
If you need to speak with an experienced business attorney please contact us online or call our Fairfax, Virginia business law office at 703.277.2811. We help business owners throughout Washington D.C., Maryland and Virginia and look forward to helping you.
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