Business Succession Planning
Your business is more than a company. It is also part of who you are and a key to leaving a lasting legacy behind. You want the doors to stay open well after you are gone, meaning business succession planning is vital. Even if you do not intend to step down for years, it is important to have a plan in place for a seamless transition. By planning early, you can also protect your company if you become incapacitated and cannot handle the day-to-day operations anymore.
Succession planning is an involved process and one you do not want to handle yourself. Thus, reach out to a Northern Virginia business succession planning attorney from PJI Law. Our firm takes a team approach and provides personal attention so we can help you draft a plan that will protect your interests while limiting your tax exposure. It is never too early to start planning, so contact our firm today.
What is Business Succession Planning?
Many people are surprised by the numerous steps required for business succession planning. Our firm can help you:
Retention and Buy-sell Retention Succession Planning
While there are various options, many business owners choose retention or buy-sell retention succession strategies. A Northern Virginia business succession attorney at our firm can discuss your goals to see if one of these options is right for you.
Retention planning is the method of choice for those who want to keep the business in the family. If you go this route, you will transfer your shares to your family members. You can choose one family member to take the reins or distribute your shares across multiple members of the family.
Buy-sell retention planning is a common choice for those that want someone outside of the family to succeed them. First, you will see if shareholders or employees would like to receive your shares. If they are not interested, you can offer the shares to someone outside of your company.
While these are the most popular options, they are far from your only choices. Contact PJI Law to discuss all the business succession strategies.
Do You Have to Plan if You Already Have a Successor?
You might think you do not need to engage in planning if you have already selected a successor. Even though you have someone to take over your business, you are far from done with succession planning. For instance, you still need to incorporate strategies to limit your tax exposure and protect your shareholders. You may also wish to make sure your employees are protected, which is valuable for them and also assuages their concerns, which in turn helps with retention. For instance, you can create a plan that requires the new owner to retain your current employees after the succession is complete. You also still need to value your business to ensure you are not leaving money on the table.
These are just some of the details you must consider when creating a business succession plan. Learn more by contacting PJI Law today.
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What Will Happen if You Do Not Have a Plan in Place?
As a business owner, you know the importance of planning. Still, you might not realize the impact of failing to plan for your succession. What will happen is dependent on various factors, such as the type of business. For instance, if you have a family business, your family members might take over ownership after you pass away. Unfortunately, a lack of a plan can lead to infighting between family members and shareholders. Even if they agree on who will take the lead, they likely will not know how to run your business since they will not have proper training. Fortunately, you can avoid this by contacting a business succession planning attorney from our firm today.
When is the Right Time to Start Succession Planning?
The answer is the same as the answer to “when is the right time to create an estate plan?” – which is, that depends on when you want your family to begin being protected. In most cases, the answer is “immediately”. Business owners start succession planning early. This gives them the opportunity to explore all options, potentially vet a successor, and have peace of mind that there is a plan in place for their family and their business. In some cases, business owners approach retirement realizing they have no plan in place. PJI Law can also assist you if you plan to retire soon and do not have a plan in place. Either way, contact us today to discuss your time frame and goals. Then, we can help you create a plan so you can enjoy your retirement.
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