Family owned businesses contribute roughly 50% of the gross domestic product in the US and are responsible for over half of all jobs. All businesses need to have a succession plan in order to provide for the retiring owners and give the business the opportunity for continued success and growth. This is particularly true for small family owned businesses that often have complex histories that are intertwined with family dynamics.
While there is not a universal solution that will fix this problem for every business, there are a variety of steps that can be taken. Optimal succession planning should take into account current federal gift and estate taxes that are triggered by transferring ownership of the business. There is the potential for huge tax savings by properly structuring the transfer. Proper succession planning can meet the goals of current business owners as well as those of other important stakeholders in the business. The goals of the process may include: providing a retirement income for a retiring owner, establishing a management succession plan, and establishing a legacy for younger generations.
You should talk with a local business attorney to see which of the succession planning options would best address your goals for the future. Your choices may include: buy-sell agreements, management buyouts, sale to employees or outsiders, gifting shares, or liquidation. Once you have a succession plan in place, a few important life events, such as divorce, remarriage, disability, or death of the primary participants, will require you to revisit and possibly revise the plan with your attorney.
Clement Law Firm, Asheville, NC -- http://www.eclementlaw.com-- 828-281-8160