What are the Key Elements of Business Succession Planning in Virginia?

Family businesses form the core of the American economy, with up to 90% of all U.S. businesses being family-owned or family-operated. From traditional small businesses to companies on the Fortune 500 list, these businesses account for about half of the Gross National Product.

However, only about 40% of American family businesses survive beyond the first generation—a sobering fact for founders hoping to stay in business for decades. Common causes of business failure include unstable finances, a heavy tax burden, and personal factors.

What can business owners do to increase the chances of successful business succession in Virginia? Here’s an outline of the key elements from our estate planning and business lawyers at PJI Law, PLC.

The Human Factor

Many businesses fall into disarray and disintegrate after the founder and principal owner retires, becomes disabled, or passes away. Planning for a suitable successor is crucial in ensuring that a business will continue to survive and thrive.

Often, business founders dream of passing their life’s work directly to their children or grandchildren. However, in many cases, a long-term talented partner or employee is a better candidate for business management.

Appointing and training the prospective successor should happen long before the original business owner plans to retire so that the management transition passes smoothly. Of course, there are always unexpected events (such as sudden disability or death). That’s why it is vital to have an emergency plan.

Taxation

Federal tax laws are complex and subject to change. For example, the new STEP (Sensible Taxation and Equity Promotion) Act may carry serious implications for people who inherit a family business. If the business has an unstable financial position, increased taxation could lead to its collapse.

Understanding how tax regulations can affect your business upon inheritance or ownership transfer is crucial to creating a sound financial plan. If in doubt, it is best to consult a business attorney with thorough knowledge of Virginia inheritance and tax laws.

Our legal team understands that business planning and estate planning go hand in hand. When you work with us, we do all we can to protect company assets, minimize taxes, and ensure a smooth and efficient company ownership transfer to heirs.

Business Exiting Options for Small Business Owners

Small business owners often choose between the following options while planning for an exit:

1. Transferring Ownership to Family Members

This route usually depends upon having a family member who is willing and able to take over. Company management requires thorough planning when several family members own interests in the business.

2. Selling the Business to a Partner or Key Employee

If your business operates under a partnership agreement, the agreement will typically determine the interest transfer in case of a partner’s exit. Otherwise, sale options vary and often include financing the business purchase over several years.

3. Selling the Business to an Outsider

Although a family-owned business may have high sentimental value, sometimes selling it to a third party is a better financial option. Preparing a business for sale includes several steps, including organizing company records, arranging for a business valuation, and addressing any weaknesses that might lower the company’s value.

4. Closing and Liquidation

If ownership transfer or business sale plans fail, the only remaining choice may be closing and liquidating the business.

How a Business Law Attorney Can Help With Succession Planning

Well-rounded legal counsel makes it easier to weigh your options. With the help of a business lawyer, you can make a more balanced decision and find a course of action that best serves your interests.

A knowledgeable business attorney can help you overcome possible legal and financial hurdles that may arise during business succession planning. At PJI Law, PLC, we have years of experience in financial moves for business organizations, such as selling business interests, conducting buy-sell agreements, and helping families plan with their long-term business planning.

As a business owner, you have worked hard to start and grow your business over the years. Don’t leave your company’s legacy to chance. Consult a corporate lawyer today to work out a personalized long-term business strategy for a secure future.

PJI Law, PLC: Business Lawyers in Fairfax, VA

Find yourself searching for a “business lawyer near me”? Welcome to PJI Law, PLC, a law firm that provides boutique legal services in business law, estate planning, probate, and civil litigation.

Our team will go above and beyond to make your life easier, with courteous, prompt service and constant communication. We help small business owners of all types and can help take legal headaches off your plate so you can focus on your business.

To get legal guidance for your business in Fairfax, VA, reach out to our team at 703-865-6100 or fill out our contact form.

The information in this blog post (“post”) is provided for general informational purposes only and may not reflect the current law in your jurisdiction. No information in this post should be construed as legal advice from the individual author or the law firm, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting based on any information included in or accessible through this post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country or other appropriate licensing jurisdiction.

PJI Law, PLC
3900 Jermantown Rd #220
Fairfax, VA 22030
(703) 865-6100

https://www.pjilaw.com

What Are Your Rights as a Virginia Landlord During COVID-19?

Being a landlord requires familiarity with relevant local and state housing rules. However, the impact of COVID-19 has further complicated the rules and processes surrounding owning and renting a property because many tenants have enhanced rights, and courts are either backed up or possibly unwilling to hold tenants to their typical requirements.

Tenants who have had their income impacted by the pandemic might attempt to postpone eviction cases for 60 days. They must simply provide the court with proof that they are not receiving wages or payments associated with the state of emergency declared by the governor.

Under the Governor’s Declared State of Emergency, What Must a Landlord Do If a Tenant Is Late on One or More Rent Payments?

Landlords rely on tenants to pay their rent on time. Per Governor Ralph Northam’s declared state of emergency, landlords must take some specific actions if a tenant is late on one or more rent payments:

Provide written notice to your tenant of the amount due and what they owe.
Give your tenant 14 days to pay the amount due and owed, make another payment arrangement, or enter into a payment plan.
Include details about providing a signed statement certifying additional expenses or income loss due to a declared state of emergency.
Explain the tenant’s ability to enter into a repayment plan for back due rent in the written notice.
The payments must be equal over the shorter of these two periods; the end of the lease term or the shorter of 6 months.
The landlord cannot include late fees in the repayment plan.

If a renter makes payments on time, as a landlord, you can proceed with an eviction filing hearing for other lease violations, as long as you do not use them as a proxy for the tenant not paying rent.

What Is Covered by the CARES Act Rental Payment Protections?

The CARES Act, which President Trump signed into law in March 2020, provided 120 days of eviction relief for those tenants living in federally backed housing. The eviction moratorium began on March 27, 2020, and ended on July 24, 2020, meaning that landlords could not serve renters an eviction notice until July 25th, 2020.

Due to additional funds given to the Department of Housing and Urban Development for housing vouchers, housing for the elderly, rent assistance, and public housing support, your tenants could contact HUD rental assistance.

The CARES Act extended eviction protections until January 31, 2021, providing an additional $25 billion in rent assistance support to those who had lost income due to the pandemic.

The CDC’s Unprecedented Role in Extending Eviction Moratoriums

On September 4, 2020, the Centers for Disease Control and Prevention (CDC) imposed a nationwide temporary federal moratorium on residential evictions for nonpayment of rent. The order’s stated purpose is to prevent the further spread of COVID-19, specifically by preventing homelessness and overcrowded housing conditions resulting from eviction.

The action, which followed an Executive Order directing the CDC to consider such a measure, is unprecedented, both in terms of the federal reach into the traditional state and local governance of landlord-tenant law and its use of a public health authority for this purpose. The national eviction moratorium took effect less than two weeks after the CARES Act eviction protections expired on January 31, 2021. The CDC’s most recent order extends the residential eviction ban until July 31, 2021.

When can a Virginia Landlord Proceed with an Evictions Filing?

Despite giving a grace period and as much support as possible to tenants, a Virginia landlord might still need to move forward with an eviction. Since most of these orders expired on March 31st, 2021, if you have attempted to work with your tenants and have been unable to resolve the situation, be prepared to file and go to court with the support of an experienced attorney.

A civil lawyer can assist you with navigating this complex process. Our team at PJI Law, PLC, knows these complicated issues and can support and prepare you for what to expect. A tenant might still bring up impacts of COVID-19 in court during eviction hearings, so an experienced attorney can advise you of the different requirements and what to expect.

I’ve Filed an Evictions Lawsuit for Non-Payment of Rent in Virginia. What’s Next?

After you have already filed an eviction case, it’s in your best interest to retain an attorney. Once a Virginia landlord has filed a Summons for Unlawful Detainer In the appropriate General District Court court and paid filing fees, the summons must be served on the tenant by a professional process server or a sheriff.

Then an eviction hearing must be scheduled within a few weeks after the summons is filed with the court. If the judge rules in favor of the landlord, they will issue a writ of eviction, and the eviction process will proceed. A judge could issue the writ of eviction as soon as ten days after entering the judgment in favor of the landlord.

If the writ of eviction is not requested within 180 days, however, the landlord will have to start the eviction process all over again. A sheriff typically delivers the writ to the tenant within 15 to 30 days of receiving the writ of eviction. The tenant then has 72 hours to vacate the property before the sheriff can return to evict them.

Contact PJI Law, PLC

Our civil lawyer team at PJI Law, PLC, has extensive experience supporting landlords who find themselves in these predicaments of having to navigate through COVID-19 and protect their investments and expectations. Our firm provides efficient, top-quality legal services in estate planning, probate, business law, and civil litigation. We focus on each client’s unique story while we offer personalized service and attention. Our professionalism, experience, and dedication manifest in our excellent reputation and stellar client reviews.

Schedule a consultation with PJI Law, PLC, today at (703) 865-6100 to learn more about how we can help you proceed with an eviction case.

The information in this blog post (“post”) is provided for general informational purposes only, and may not reflect the current law in your jurisdiction. No information contained in this post should be construed as legal advice from the individual author or the law firm, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through, this post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country or other appropriate licensing jurisdiction.

PJI Law, PLC
3900 Jermantown Rd #220
Fairfax, VA 22030
(703) 865-6100
https://www.pjilaw.com

All posts by: admin