Business succession planning can involve various legal vehicles and documents, as it is tailored to the type of business, ownership formation, existing succession documents, and the succession intent of current owners. There are multiple ways to plan for and legally guide your final succession plan to ensure that your wishes are observed.
What documents do I need for business succession planning?
Start with a well-drafted agreement that might include provisions regarding an owner’s exit and how it will be managed. This is true for any type of business entity. If an operating agreement already exists without these provisions, it’s possible to execute a buy/sell agreement to indicate the wishes of the owners/members/shareholders.
What if I have an operating agreement in place, but it doesn’t address the exit of owner(s)?
A well-drafted agreement for any type of business can include provisions regarding management of an owner’s exit. If an operating agreement already exists without these provisions, it’s possible to execute a buy/sell agreement to indicate the wishes of the owners/members/shareholders.
How often should I review my business succession plan?
You should review your business succession plan at least annually and certainly when changes in tax laws, valuation, industry developments, or family dynamics occur.
What are some common ways to transfer ownership of a business?
 - Co-owner: Selling shares or ownership interests to an existing co-owner
 - Heir: Passing ownership interests to a family member
 - Key employee: Selling to a key employee
 - Outside party: Selling to an entrepreneur outside the organization
 - Company: For a business with multiple owners, ownership interests can be sold back to the company and distributed to remaining owners
These are just some of the vehicles available to guide your succession strategy. An experienced and knowledgeable professional can help you explore options and make certain the proper paperwork governs your plans.
Contact Angela Odensky at The Law Office of Angela Odensky at info@odenskylaw.com to ensure your business continues per your wishes.Â