Closely held businesses, especially family businesses, require careful estate planning to assure a smooth transition of the business upon retirement or death of the owner. The business owners should consider whether they want the business to pass from generation to generation, or if the business should be sold to a partner or third party. Regardless of the owner’s plans for the business, without proper planning, a difficult and uncertain transition inevitably results.
Business succession planning begins with an open line of communication among owners and their families to gather an understanding of their goals for the business. From there, just like with one’s personal estate, it is important to put that plan in writing and begin taking steps to facilitate the proposed transition.
Business Succession Plans can range from simple (wherein the plan is set forth in the initial formation documents) to complex (wherein the plan is part of a more comprehensive agreement involving one or more parties). Most importantly, ownership and management transitions are always more successful when developed as part of a well thought out and documented plan.
If you need assistance with a current or prospective transition of your business, please contact us to schedule a complimentary consultation at (714) 581-8808.