A Succession plan makes it clear who will take over the business, reducing any potential disputes between parties. If a purchase is involved, the sale price and purchase terms are clearly outlined, relieving some of the stress for the departing owner’s family.
The passing of ownership from parent to child is an age-old practice. However, the issue of family succession comes with the same if not more challenges than the hand-off to a non-related business associate, especially when it comes to the tax consequences of gifting ownership rather than selling. There are different way’s a succession plan may work like Selling your shares or ownership interest to a co-owner, passing ownership to interest to a family member, selling your business to a key employee, selling your business to an outside party, or for a business with multiple owners, you can sell your ownership interests back to the company, then distribute to the remaining owners.
Proper succession planning calls for careful consideration and preparation. Whether someone is nearing retirement age or setting up shop, small business owners should take time now to build a succession plan that protects their business longevity and secures their financial future.
Do not hesitate to contact the attorneys at Tishkoff if you have questions regarding business law or litigation. The attorneys at the Tishkoff law firm, located in downtown Ann Arbor, Michigan, may be reached by phone or email. This contact information is available at Tishkoff’s web site: www.Tish.Law