Retiring from your position as an acting business owner is both a difficult and emotional process. To ensure that you receive an amount that is representative of your equity within the firm, it’s important that you craft a business succession plan with a fitting Springfields solicitor. To protect your exit, consider the following tips for creating the appropriate succession plan.
Tip #1 – Begin Planning Early
As with any business plan, it’s imperative that you begin your process ahead of time to manage the potential impact of your presumed retirement or unexpected events that may lead to the exit of a business owner. Erect an engagement strategy for potential successors that may include internal employees, family members, or industry and financial firms. With one, you can weigh your options in advance and make the most informed decision possible.
Tip #2 – Seek a Realistic Individual Valuation
Valuing an unlisted business can be a complicated process, especially without a method of understanding the worth of your business in place. When selling a business as part of your retirement plan, it’s important that you course this task through an independent valuer. This is often required within buy-sell arrangements with supporting insurance.
Tip #3 – Come Up With a Shareholders and Partnership Agreement
A contract between individuals who have a shared interest in your business, a partnership agreement details how you would like to have your business run, the exit strategies in place, and any additional funds. This agreement should cover any agreements regarding the transfer of ownership under various events such as retirement, death, or disability that may or may not be predicted. Well-crafted agreements should cover all potential circumstances and be prepared by professional solicitors from a Springfield law centre.
Tip #4 – Note Key Information
In addition to key formal documents that may be crafted alongside a will and estate lawyer, informal plans can be outlined on the occasion that unexpected events arise. This may include the contact details of important partners, software passwords, supplier details, negotiating tactics, and key staff members.
Tip #5 – Prepare For Your Sale
When less reliant on a business owner, businesses have a higher value that is determined via a company’s goodwill and branding. Remember, as you exit a business, you remove yourself from ongoing operations, leaving your business to function on its own. This may demand long-term planning that involves new systems, processes, and staff. Allow potential acquirers to review a clean set of financial statements and note that additional expenses covered by the business may shrink your valuation.
Tip #6 – Don’t Overpay Taxes
With careful tax planning, you can minimise any tax consequences when selling your business. Seek professional advice from a certified accountant and financial planner to make the most of small business capital gains tax concessions. Remember, CGT concessions will vary depending on the state of your business.
Handing off your business to a potential buyer is never an easy process. Thus, a well-planned estate can bring peace of mind to you in the future. For legal services that have proven long and successful within the Springfield and Ipswich area, consult with us at Springfield Legals. We equip our clients with only the best Springfield solicitors that have acquired over 20 years of expertise.