Succeeding at Business Succession

Family businesses account for 54% of private sector Gross Domestic Product (GDP), yet 43% of family businesses have no formal succession plan. While those numbers may shock you, it is not surprising that many small business owners are consumed by the myriad responsibilities of running their businesses.^1,2

不过, owners ignore succession preparations at their peril and possibly at the peril of their heirs.

There are a number of reasons for business owners to consider a business succession structure sooner rather than later. 让我们来看看其中的两个.

第一个原因是税收. 在船主死后, 可能需要缴纳遗产税, and a proactive strategy may help to better manage them. Failure to properly prepare can also lead to a loss of control over the final disposition of the company.³

第二个, the absence of a succession structure may result in a decline in the value of the business in the event of the owner's death or an unexpected disability.

The process of business succession is comprised of three basic steps:

1. 确定你的目标: When you know your objectives, it becomes easier to develop a plan to pursue them. For instance, do you want future income from the business for you and your spouse? What level of involvement do you want in the business? Do you want to create a legacy for your family or a charity? What are the values that you want to ensure, perhaps as they relate to your employees or community?
2. Determine steps to pursue your objectives: There are a number of tools to help you follow the goals you've identified. They may include buy/sell agreements, 赠送股票, establishing a variety of trusts, or even creating an employee stock ownership plan if your desire is that employees have an ownership stake in the future.
3. 实施策略: The execution step converts ideas into action. 一旦实施, you should revisit the strategy regularly to make sure it remains relevant in the face of changing circumstances, 比如离婚, changes in business profitability, 或者一个利益相关者的死亡.

Keep in mind that a fundamental prerequisite to business succession is valuing your business.

你们可以想象, business succession is a complicated exercise that involves a complex set of tax rules and regulations. Before moving forward with a succession, consider working with legal and tax professionals who are familiar with the process.

1. FamilyBusiness.org, 2023
2. FamilyBusinessCenter.com, 2023
3. Typically, estate taxes are due nine months after the date of death. And estate taxes are paid in cash. 除了遗产税, there may be a variety of other costs, 包括遗嘱认证, 最终的费用, 还有管理费.

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