If you own a business, safeguard it for future generations
Many business owners’ financial plans assume they will live long into retirement, and consequently, most have not made provisions for if and when they die.
Without a valid Will the deceased’s share would be subject to the Laws of Intestacy and the person who inherits may not be the person you intended. Would you or your business partner be content to run your business with their surviving spouse or their beneficiaries? This could have a major impact on the running of the business or the value of the business may now go down following the death of such a key person.
Without a valid Will, your share of your business would be subject to the laws of intestacy and the person who inherits may not be the person you intended.
So if you or your business partner had to run your business with their surviving spouse, or their beneficiaries, this could have a major impact on the running of the business, or its value.
Why it’s important to formalise a business succession strategy
Without the appropriate business succession plans in place, your business may be vulnerable to a variety of risks:
• Your spouse/partner and children may not inherit your share of the business;
• The surviving business partners may not be able to buy out the deceased’s share;
• The surviving spouse or children may be obliged to take over the running of the business;
• The value of the business could depreciate owing to the inexperience of any beneficiary;
• The business may have to be sold and the proceeds become liable to Inheritance Tax.
All this could leave your family, your business partners and employees with hugely stressful challenges, turmoil and – ultimately – the folding of the business.
The terms of a Business Will set out your wishes and divide your assets in the way you intended. It can protect the partners against potential takeovers and allow them to buy the available shares in the event of a death, giving the family of the deceased the cash value of the shares rather than the responsibility for running the business.
For expert advice on how to drastically reduce, or even avoid, the Inheritance Tax payable when the business is passed to, or sold by, your family call Eli Pressman at Barnet Wills on 020 3189 1737.
Making a Business Will in your lifetime is a straightforward process.
All the objectives and aspirations of the shareholders or partners are taken into consideration and we will also ensure that your Business Will takes into account all the provisions of your personal Will.
But what about beyond death planning of a shareholder?
As an business owner you’ll have a clear vision of what you want to achieve from it and more importantly what you want when you retire or sell your shares. To maximise the value you get from the business, it’s essential to think about how you’ll leave it further down the line.
Carefully planning your exit from the business can help you to:
- mould your business into the ideal shape for your chosen exit option – maximising the value you get from it
- groom successors if they’re coming from within the business – whether they’re a family member or part of your management team
- exit at a time of your choosing, when the business is doing well and the market conditions are advantageous
- Ideally, you should include an exit strategy in your start-up business plan. It can then be reviewed and revised whenever you work on your annual business plan and budget – and you can steer your business in the direction that your exit option demands.
If you manage an existing business and don’t have an exit plan, you should now think about what your preferred exit option might be – and consider whether you could change the way you run your business to help you achieve it.
The way in which you exit can affect:
- the value you, and other shareholders, realise from the business
- whether you receive a cash deal, deferred or staged payments
- the future success of the business and its products or services
- whether you retain any involvement in, or control, of your business
- your tax liabilities
So come and talk to us at Barnet Wills, and together we can draft your Will to ensure your family is well provided for, and that your business, business partners and employees are looked after in accordance with your wishes.
For further impartial advice regarding all aspects of Business Wills, Trusts and Lasting Powers of Attorney, call Eli Pressman at Barnet Wills on 020 3189 1737 or email firstname.lastname@example.org