The operational needs of running a business can be all-consuming but with extra time on our hands this could well be a good opportunity to consider succession planning. The Covid-19 pandemic has shown how physically and mentally challenging uncertainty and disruption can be whereas continuity preparation is a useful tool to help drive future growth, help reduce taxes and preserve harmony within families.
Succession planning tends to come to the fore as a retirement looms but it is not the only driver forcing proprietors out of ownership. Unexpected life events can happen at any age and continuity plans ensure the right people inherit the business, operations continue to run smoothly and owners are able to exit under fair circumstances.
A good starting point for consideration would be:
The most common succession plans involve:
Selling a business to a co-owner
If you established a business with a partner or partners, you may consider your co-owners as potential successors. Many partnerships draft a mutual agreement that, in the event of one owner's untimely death or retirement, the remaining owners will agree to purchase their business interests.
Passing a business to an heir
Deciding on an heir as your successor is a popular option for business owners, especially those with children or family members working in their organisation but it is not without complications. Consideration points include:
The succession planning process is inevitably complex but to avoid ambiguity working through the process can help everyone involved.
ILS World is a global provider of independent fiduciary services assisting with compliance, administration, asset and advisory services to businesses and private clients.
We act in the long term interest of our clients creating long-term relationships and providing high service levels. We work to be approachable, flexible and pragmatic offering regular face-to-face meetings as required. Members of our team have diverse backgrounds, skills and interests and their professional experience together with their "can-do" attitude means they understand that wealth and business is inextricably linked.
For further information on succession planning please contact email@example.com
Please note: ILS World does not offer tax advice and would therefore recommend you obtain your own tax advice. If you require an introduction to a tax adviser we would be happy to assist.
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