Owning your own business, including a closely-held family business, can be the epitome of the proverbial “American Dream” for some people. It can be extremely rewarding, both financially and personally, but it is also extremely challenging. Successful owners typically stay intimately involved in the business’s day-to-day operations, but sustained success is only possible with long-term planning.
A lack of planning is among the biggest reasons that family-owned businesses often start to falter when they are passed on to subsequent generations. Succession planning is also important for those involved in partnerships and other types of businesses. An owner who becomes unable or unwilling to fulfill his or her current responsibilities can cause the whole company to become uncertain.
At the offices of Douglass & Runger, our attorneys for long-term business planning in Shelby County work with business owners of all types. We are equipped to help you and your family as you look to secure the future of your investments.
Why Is Business Succession Planning So Important
As a business owner, you probably have countless ideas, plans, and thoughts regarding your company’s future. However, if you never write them down or formalize them, your business might not survive if you suddenly become unable to run it. Succession planning is an essential element of ongoing profitability for any type of commercial venture.
In many ways, business succession planning is similar to personal estate planning, and for most business owners, the two are very much intertwined. Both succession and estate planning require a person to carefully consider his or her goals for the future—both professional and personal goals. If you would like to pass the majority stake in your company to one of your children, for example, our attorneys can help you develop a plan.
Likewise, if your plan is to dissolve the business upon your death or incapacitation, we can facilitate that as well. At Douglass & Runger’s offices, we work closely with our clients and develop long-standing relationships with them, which gives us the insight to offer guidance and make suggestions that will protect their best interests.
Passing On Your Business
Most family business owners wish to pass their businesses on to a future generation at a certain point. It is crucial, however, to develop a definitive plan to facilitate the transition so that uncertainty and tension between partners or family members can be reduced. For example, your plan could start shifting duties and responsibilities to your chosen successor gradually, and the controlling interest of your business could follow based on his or her performance.
At our firm, we also help draft succession plans for corporations and partnerships. The stability of such a company can be threatened if one partner or shareholder is unwilling or unable to stay invested in the business. Our team can create succession plans that address the possibility of personal bankruptcy, a divorce, physical or mental incapacity, or even the death of a shareholder or partner.
Depending on the circumstances, such plans could also include buyouts, transfers of holdings, or a total restructuring of the company.
Business Law Matters
When starting a business, consider the legal structure: partnership, LLC, or corporation. Formation services can help. Plan for business succession and legal issues such as disputes and dissolution. Understand business law and legal resources for help.
