Hickory Business Succession Planning Attorney
Firm assists with transitioning ownership or control to the next generation
When you step away from your responsibilities as a business owner, establishing a sound transition framework is a critical task. At Donald R. Fuller, Jr., PLLC, I am a Hickory business succession planning lawyer who helps stakeholders prepare for the changing of the guard. My firm designs individualized plans based on your unique circumstances and goals.
Why have a business succession plan?
There are many solid reasons for drafting a business succession plan, including:
- Creating a path for retirement — Establishing a succession schedule helps the owner gradually relinquish control and minimize disruptions. This protects the value of the business if you plan to maintain a stake that provides retirement income.
- Providing a period of transition — A sound plan gives new owner-operators an opportunity to learn the intricacies of the business before taking the reins. The transitional period also allows clients and employees to get used to new leadership.
- Maintaining stability — You’ve built a brand that clients and customers recognize. Your plan can assure them that the quality of goods or services is not going to suffer once you step down.
- Protecting against losses due to tragic circumstances — Even if you are not looking to leave in the near future, a business succession plan provides a measure of insurance. In the event of an untimely death or disability, the organization has a plan for moving forward. This allows operations to continue during a crisis.
With a business succession plan, you can pass the baton without fumbling the exchange or losing momentum.
What is included in a business succession plan?
The key elements of a business succession plan include:
- A statement of the goals of the business owner — Do you want to cash out or retain an ownership interest that pays you in retirement? You might consider a reduced role after stepping down from leadership.
- The goals of any other stakeholders — Everyone who has a stake in the company should know where they will stand after the transition.
- Protection of assets — Post-transition ownership of assets, including intellectual property necessary to operate the business, should be clarified.
- Naming new leadership — The plan should explain the new ownership structure and assign roles to people in leadership positions.
- Accurate valuation of the company — There are several ways to conduct a business valuation, depending on whether you’re planning to sell off assets or continue operations as usual.
- Timeline and metrics — Setting a timeline for the transition and creating milestones that must be achieved can keep the plan moving forward.
- Tax considerations — Great care is required to address the tax impact of transferring company ownership, particularly if you are passing the company within your family.
As an experienced Hickory business lawyer, you can trust me to help you develop a detailed plan that builds in a range of contingencies.
What are some special concerns for family-owned businesses?
Family businesses have sentimental as well as economic value. Owners must be clear-eyed about choosing the best candidate for leadership, while allowing the business to benefit others.
When should you create a business succession plan?
Owners of closely held businesses should draft a plan as soon as the business becomes a viable source of income. Because the future is uncertain, the time to act is now.
What happens if you don’t have a business succession plan in North Carolina?
Without a succession plan, the business might lose productivity and the new owner might suffer serious tax consequences. Whether the title is bequeathed in a will or assumed by other joint owners, the business could founder if there was a failure to prepare. A succession plan safeguards the company you’ve worked to build.
Contact a dedicated North Carolina lawyer for business succession planning
Donald R. Fuller, Jr., PLLC in Hickory advises North Carolina business owners on succession planning. Please call 828-639-8188 or contact me online to schedule an appointment.