You see it on the news, online media sites, on social media – a successful privately held business closes after the owner’s sudden death or divorce and a dozen other reasons that leaves a leadership vacuum that is never filled. An overwhelming number of those sad stories are because the business never planned for the owner not being there.
No successful business – of any type – should operate without a succession plan.
The Law Office of George W. Svoboda can help you insure that your business continues. We know how to plan, we know the law, we know business, we know how to layer contingency on contingency to protect your legacy.
Good Businesses Fail
A succession plan goes far beyond simply naming who takes over a privately owned company. A good succession plan ensures the company’s future. A good succession plan ensures that the company continues to benefit family members, shareholders, and employees long after the founders have moved on.
What happens when there is no succession plan? Intra-office, and intrafamily drama, anger, hurt feelings, and Machiavellian actions. The business is neglected and eventually fades away. It’s easy to avoid that: make a plan.
A plan that allows the business to continue to operate successfully after an owner retires or dies. Or to make sure the company is sold for its full worth. I have years of experience and success, as a management consultant and attorney, designing and implementing succession plans for closely held companies of every size. Plans that work.
Problem Solving Before There is a Problem
Succession plans are not simple. They are not something you pull off Google and fill in the blanks. There are questions to be asked and answered, conversations to be had with owners, key employees, and family members. Those questions and conversations should address:
- Ownership structures
- Triggering events
- How to keep employees
- Compensation – in all regards
These are baseline issues, other issues and considerations branch out from there. They must be addressed.
Successful Succession Plans
A successful succession plan protects the company, the owner(s), the family, even the employees. It’s protection against the unexpected. Negotiating, designing, and drafting a plan can be emotional for the owners, family, and key employees. The plan will inevitably affect everyone involved in several ways. That’s why communication between everyone is vital. A solid succession plan usually includes:
- Buy-Sell Agreements that govern buy-outs due to death, disability, or retirement.
- A transition plan.
- Trusts to maintain control of the business.
- Compensation packages for key employees.
- Employee stock ownership plans (ESOP) that give employees an equity interest in the company.
- Income, gift, and estate tax saving strategies
- Tax planning that may include reforming as a different corporate entity.
- Minimizing liability exposure.
Your Next Steps
It sounds like a lot but it is not overwhelming when you collaborate with an attorney with business acumen and decades of experience designing and implementing succession plans. I am that attorney. Contact me, let’s talk about your business.