Although many small business owners think they don’t need to worry about exiting their business until they get close to retirement, unexpected life events can happen at any time. An effective exit plan is particularly critical to the continuation of small, family-run operations to avoid conflict and other problems that may arise. Whether you are new entrepreneur or getting close to retirement, an experienced business succession planning lawyer can help you develop a well thought-out plan that will make the transition easier and more beneficial to everyone involved.
Why Plan Early?
Having a business succession plan in place can help you avoid serious headaches and allow operations to run smoothly when you exit the business, regardless of whether it’s due to unforeseen events or you have decided it is time to retire. There are several reasons why it is never too early to consult a business lawyer who can help you make a solid plan, including:
Choosing and training a successor is vital. Whether it is a family member, employee or another individual, choosing the right person to be your successor is critical to the successful continuation of your business. When family is involved, this decision can be clouded by emotional attachment. In addition to helping you create important documents that protect your interests and those of your company, a contract attorney can help you determine who would be the most practical and effective person to be the successor to your position. It is also important to properly train the person you choose, to ensure they understand the little details and the big picture of running the organization. Planning early gives you the time to do it right.
Addressing tax liability and debt. A well-crafted business succession plan employs strategies that minimize the tax liability of transfers of ownership or sale of a company. Not only that, if you have business lines of credit or bank loans, upon your death or incapacitation the bank can come calling and force repayment of the money you owe. A good business succession plan includes information on how debt will be handled in the event of your untimely exit. Certain assets or funds can be designated in the plan to repay loans if necessary.
Planning for retirement. Estate planning law firms do so much more than help clients get their estates in order. They can help you develop a business succession plan that ensures you have the funds you need for your retirement while allowing your business to continue to thrive after you’re gone.
An Experienced Attorney Can Make All the Difference
When choosing an attorney, it is important to hire someone with experience in handling all legal aspects of your business. For example, if you are going into the construction business, hiring experienced real estate lawyers who understand the ins and outs of local, state and federal law pertaining to your industry would be your best bet. At Carosella & Associates, our seasoned legal team can help you get your business off the ground and give you the tools and peace of mind you need to make a proper transition when the time comes.