Succession planning is important for all business owners. Working out exactly who should take over from you when you retire, or if you pass away, and setting out a process for that succession helps build stability within the company and avoid a power struggle later on. However, it’s also a useful way to ensure that the business retains its top talent.
Many employers are reliant on a traditional ‘career ladder’ structure, with talented staff moving vertically within the business based on length of service. However, this structure risks alienating multi-talented members of staff who can thrive across different sectors and specialisms.
Business entities, just like people are subject to the cycles of life which can unfortunately include the demise of owners and partners. Cases of partners passing away and leaving the remaining business owners straddled with debt or forced to fight for their share of the business with the dead partners family members are all too common.
The earlier you set out your succession plan, the better. Who is best placed to take over once you step down or pass away unexpectedly? Who is best able to do the job, not simply the person who has been there longest?
Have you stipulated whether you want a family member to take your place and help to run the business in the event of your own death. This helps to ensure that the business will continue to operate even after your death and avoid squabbles and legal procedures between your family members and the remaining owners. Should your family members display a lack of interest in taking over your place in the business you can give other partners the option to purchase your share of the business and pass proceeds of the sale to your family.
Planning for the future and establishing exactly what you want to happen with your business, your home and your assets, should you pass away is incredibly important. It can bring stability and avoid upset for your loved ones at an already upsetting time. Getting advice from an expert and putting together a proper Will is the best way to do that.
Planning for the future and establishing exactly what you want to happen with your business, your home and your assets, should you pass away is incredibly important. Having a business Will in place ensures smooth handover of the business to either a family member that wishes to take your place or give your business partners, as well as your family, the option to transfer ownership if either party is unwilling to continue with the relationship. It can also bring stability and avoid upset for your loved ones at an already upsetting time.
Barnet Wills can help you to decide on the best option for you and help you to draw up the necessary legal documents to ease the transition for your business and family upon your demise.