Creating a Solid Foundation for Your Goals
Planning for your business succession should be done sooner rather than later in your business development. By thinking this through at the early stages of your business, you identify the personal outcomes you have in mind for your involvement in the business and can then begin with “the end in mind.” This helps you to weigh opportunities that come your way and provides you a disciplined approach for achieving your goals. And even if your goals change over time, you have a solid base from which to make changes.
Key Legal Elements
Business succession planning does not include just business planning; rather, it ties in other areas of law, including estate planning, tax law, and trust law. The primary document used to implement business succession planning is a buy-sell agreement. A buy-sell agreement is entered into among closely held business owners and the company. The agreement, among other things, restricts the transferability of the ownership interest and, when properly funded, provides business owners an economically reasonable method to compensate an owner for his/her ownership interest.
It is important to ensure that proper funding occurs. Often, insurance can be a main source of this funding. To learn more about how Thompson Stewart can help you in your business succession planning contact us for a free consultation.
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“Business succession planning does not include just business planning; rather, it ties in other substantive areas of law including estate planning, tax law, and trust law.”