Business Succession Planning

If you own a business, or starting a business, you should have a plan in place in case something should happen to you, or to any of your key employees.  The future of your business should be one of your top priorities. The profitability, sustainability and continuity of a business may be seriously impacted without a business succession plan.

 

There are numerous events we have no control over. Smaller businesses with less than 15 employees are most susceptible to collapsing if the owner or key employee should fall ill, become incapacitated or pass away.

 

Is your business prepared if something should happen to you, the owner? Would your business have to liquidate your interest to survive? What would happen to unfulfilled contracts - would those clients sue the company? Is there a transition order? Would your family or personal finances become entangled with your business? Are there any voting rights?

 

Time tends to sneak up on us as well. Are you, or one of your key employees thinking about retiring? What if one of your most experienced and skilled employees turn in a resignation to retire? What if two employees decide to retire at the same time?

 

Having an effective business succession plan in place may be one of the most important elements you create to keep your business running smoothly and uninterrupted.

 

A well-planned succession plan generally focuses on senior management, however, every key position should be included in the plan and/or any position that is crucial to your business operation.   

 

A qualified and experienced business attorney can set in place the goals you’ve established and a strategy to protect your business. There are numerous areas your attorney can review, evaluate and analyze including your equity, contracts, agreements, incentive plans and insurances. 

 

Your business attorney can provide a comprehensive analysis to determine whether the creation of a trust would be in your best interest. Other issues include estate planning relevant to business succession, personal and business taxes, the addition of any new partners or equity holders.

 

If the business is family-owned, estate planning is crucial to the unique concerns or disputes that may occur after the death or incapacitation of the owner. Having your attorney understand the family dynamics can preserve your business by providing effective and efficient legal counsel regarding the succession planning.

 

Setting up a business succession plan can also express to your family, employees and clients your business will continue to operate under any circumstances.

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For more information on business succession planning and other business issues, visit our Business Law webpage and learn more about our Denver business lawyers.