Your family business is your pride and joy, and you have undoubtedly invested a great deal of money, time, and energy into creating a successful company with the intention of passing it on to your relatives when you retire. There are many challenges that can arise that can put your plan at risk (such as family disagreements or taxes), but these suggestions can help you create a viable succession plan to pass the business on to the next generation.
Look At the Current Structure of the Business
If the family business is currently classified as a Sole Proprietorship or Partnership, only the assets of the business can be passed on – not the business itself. Forming a corporation will circumvent this issue and allow the business to continue operating after its sale.
Establish Goals and Objectives
It is never too early to start planning for the future, and the more detailed objectives you have, the smoother the eventual transition will be. Think about what direction you want the company to move in and which people are most able to achieve those goals. Always try to involve your family in this process and maintain an open dialogue among those family members who are involved.
Make the Best Decisions For the Company
Don’t forget that this is a business. You must objectively look at which family members are capable of taking on specific roles, and know that not everyone will get an equal share. There are many arrangements that can be made that will allow non-managerial family members to benefit from the business and your attorney will help devise the best plan for your individual situation.
So much goes into the successful transition of your business. You want what is best for your family and for the transition to be as easy as possible. An experienced attorney, like those at Churchill, Quinn, Richtman & Hamilton, can provide essential advice on company structure, planning strategies at all stages of the company, plus many more valuable options that can help the company thrive from one generation to the next. Call us at 847-223-1500 or visit grayslakelaw.com for more information.
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