Christopher K. Caswell Business Planning Law Blog on Lawyers.com

BizCare(sm) - What's Your Plan? - For Business Succession

Friday, January 7, 2011 by Christopher K. Caswell

Businesses are usually the largest asset of a business owner. But most owners
tend to keep their head down, work hard to meet payroll and other obligations,
maneuver through the minefield of contractual and employee relationships, and in
the end strive to make a profit and even leave their mark on the world.

Yet
business owners always deny the inevitable. The business cannot survive, much
less thrive, without them. They will never die. So long as the business is
profitable, there's no need to think about longer-term issues.

Again, a business
is usually the largest asset of a business owner and it is their legacy. So
doesn't it make sense that a business owner should take the time and plan for
the full protection of that asset, the maximization of its value and the full
achievement of that legacy? This can only be done with comprehensive planning
and a good team of trusted advisors for the business and the business owner.

Key
Benefits of Business Succession or Exit Planning

Avoid or minimize ownership
transfer costs
Maintain control until transfer occurs
Minimize taxes
Optimize the value of the business
Create a comprehensive financial and estate
plan to coordinate the business succession with life succession
Create
confidence and buy in from all stakeholders in the business (family, employees,
customers, etc.)

Understanding Succession Planning

It is a process and not an
event
Need to determine owner retirement goals and income needs
Why
valuation is a key to setting realistic succession objectives
How do you deal
with transfer issues for sole owners
Buy sell considerations for co-owned
businesses
Minimizing tax consequences to buyer and seller
Review of
deferred compensation techniques
Consider pre-sale planning techniques such as
GRATs, CRTs and FLPs
Issues to consider if selling to insiders
Understanding
Buy Sell Agreements
Is now the time to use an ESOP?
When and why to use Stay
Bonuses
Traditional sale vs. a modified sale
The importance of a contingency
plan

We help business owners to understand this process, develop their plan
and get their trusted advisors, key employees and family members to buy in and
commit to the implementation of the plan. A successfully retired business owner
is the reward for a life of good work. Copyright 2009 Caswell | Legal

Posted at 21:03 PM

Topic: Business Planning