A Checklist For Business Succession Planning

As a business owner, a business succession plan is critical for a seamless transition if you ever decide to leave the business. If you do not have a business succession plan, your family and co-owners may not know how to act if you become disabled, retire, or pass away. Without a business succession plan, your business may lose value, clients, and shareholders.

Have Conversations with Key People 

Before doing anything else, you should have conversations with your family, co-owners, and employees to determine who will replace you in the event that is ever necessary. After speaking to these individuals, you can gain a better understanding of who wants to succeed you as a business owner, and who does not envision themselves taking over.

Choose a Future Owner 

After speaking to key individuals in your family and business, you then need to choose a future owner. You should decide depending on your own preferences, other people’s wishes, and who you think can perform in the role. Then speak with the candidate to ensure they know what will be expected of them and to confirm their commitment.

Create the Business Succession Plan 

Once you have a plan in place, you need to put it in writing. Your plan should cover all scenarios including possible illness, disability, vacation, retirement, and death. You should also include in your plan any tools the new owner will need to succeed, which can include:

• Mentorship
• Financial resources
• Training and education
• Access to systems, such as the company’s computer data

Purchase Life Insurance 

The next step in business succession planning is to purchase a life insurance policy. This is a way to ensure your family has financial support if you pass away. A life insurance policy can also serve as a transfer vehicle. For example, if you pass away, the death benefits of the life insurance policy can be used to buy out your share of the business. Your share can then be distributed to the other partners in the business.

Establish a Trust 

A living trust allows you to place property, such as your business interests, into the trust. Ownership of the property is transferred to the trust, but you can maintain it during your lifetime. You will also name a successor trustee to manage the trust in the event that you become incapacitated or pass away. Property within a trust is not subject to probate and that provides additional protection for it.

Our Business Succession Lawyer in St. Petersburg Can Protect Your Interests 

As a business owner, it is critical that you have a succession plan in place to protect your business, employees, clients, and loved ones. At Legacy Protection Lawyers, LLP, our St. Petersburg business succession lawyer can help you draft a plan properly and ensure no mistakes are made so your plans and final wishes are clearly outlined and will be executed. Call us now at 727-471-5868 or contact us online to request a consultation and to learn more about how we can help with your case.

Source:

leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0700-0799/0736/0736.html