A good enterprise ensures your family has a decent source of income and employment for a lifetime. Unfortunately, you will not forever be around to run the business and planning for this eventuality is essential.
Lack of family business succession planning is a significant cause of legal battles and failing businesses. It is therefore essential to get a Denver, CO-based attorney experienced in family law and commercial law to help you draw an effective succession plan. Here are the elements you should focus on:
Regularly updating and reviewing your shareholder agreement is essential in succession planning. Ensure your agreement reflects the intentions of your current shareholders. Your succession plan should reflect any changes in your business’ ownership pool and how shares will be transferred to the next generation of owners.
This is an essential document that outlines the key people that should be consulted in case you pass on or become incapacitated. These should include the trusted advisors outside your company and your key employees. The advisors and employees you select should have clear instructions on how to handle your business before it is passed on to your successors.
Another critical element you should address in your succession plan is your retirement plan. This plan is essential to enable you to retire in peace and still ensure the business runs profitably after your exit. The retirement plan also helps you in planning when to retire and how much the company will afford to pay you in retirement for a decent life.
Personal estate planning is essential for you to understand how much you have to allocate among your family members. This enables you to distribute your business assets equitably. With a good succession plan in place, you will avoid financially and emotionally costly family legal battles.