Part of owning a company and preparing your estate is forming a business succession plan. This entails deciding what will happen to your small business once you no longer are willing or able to run it.
You do not need to wait until you want to move on to another enterprise or are ready to retire before contemplating these matters. The sooner you establish a clear arrangement for the future of your business, the more benefits you will receive.
You may automatically think of leaving your company to a family member or business partner. However, that not may be the best option. Ask yourself the following questions as you make your choice:
- Does the person want to run the business?
- Does the person share your standards and goals?
- Does the person have the knowledge, time and passion to take over?
If the answer is no to any of these, determine how important that factor is. You can decide to grant ownership to one person but appoint management to another.
When you already have a plan in place, you allow for more time for a smooth transition. You can begin training potential successors and making sure they fit with the company. You also make clear what the expectations are for the next owner and the future of your business, whether you want it to remain true to its original vision or you do not care what changes the person makes.
Quick estate settlement
A thorough succession plan can help in the quick settlement of your estate by preventing delays and disputes. Remember to include unexpected life changes, such as incapacitation or divorce. Furthermore, having a plan may lead to tax savings.
Begin the process of planning for the succession of your business with the assistance of an attorney who has experience in both Pennsylvania business law and estate planning.