Business Succession Planning
One of the toughest challenges a private, owner-managed, closely-held or family-owned business will face is the creation and implementation of an effective and comprehensive business succession plan. Our experienced Business Succession Planning attorneys assist private, owner-managed, family-owned and closely held businesses with the vital task of Business Succession planning. As part of our multi-disciplinary Business Law, Tax Planning and Estate Planning practice, we provide Business Succession planning legal services in Greenville and through South Carolina, North Carolina, Georgia and Florida. The long-term survival of a business and the preservation of the wealth that has been built will likely depend on getting ahead of those changes through strategic succession planning.
What is Business Succession Planning?
Business succession planning is the process of determining how you are going to transfer your business ownership or “exit” and transition out of a business management role, while maximizing your personal financial security. Our Business Succession Planning attorneys work with Business Owners to evaluate various Business Succession planning strategies and options including estate and retirement planning and develop a roadmap for a comprehensive succession plan addressing trigger events such as death, disability and illness, securing the survival of the business through effective transition of ownership interests and maximizing the return of the retiring owner’s investment.
Family Business Succession Planning by the Numbers
“88% of current family business owners believe the same family or families will control their business in five years, but succession statistics undermine this belief. According to The Family Firm Institute, only about 30% of family and businesses survive into the second generation, 12% are still viable into the third generation, and only about 3% of all family businesses operate into the fourth generation or beyond.” Failures of the company survival can be traced to one factor, a lack of business succession planning.
Various studies have revealed that 80% of business owners exit their business to retire and that 50-75% of a business owners’ net worth is in his/her business assets with the balance is in their personal real estate and financial investments. Yet the sad truth is that 85% of family businesses have no business succession plan, 67% have no buy-sell agreement and only 29% have an estate plan. (source: Family Business Institute)
Business Succession Planning Process
We provide support and life-cycle management of the business succession planning process including the following components:
Components of the Business Succession Planning Process
- Establish owner goals and objective: Owner retirement, family member, stakeholders (partners, shareholders, employees), address death, disability and illness;
- Inclusion of Family members in decision process: Communication, process for addressing family changes and disputes, detail family to business relationship;
- Identify successor(s): potential, train, transition of responsibility in ownership and management;
- Estate Planning: Tax planning, retirement income, family member provisions, active and non-active family members, financial considerations
- Contingency planning; Address the “what-if” scenarios and the occurrence of possible unplanned situations;
- Organizational structure, transfer methods: Review and update organizational and structural business plan, identify roles and responsibilities, key positions, financial team (legal, accounting, finance)
- Sale, Business valuation: maximize value, tax benefits, recommendation and preparation and of buy-sell agreements, sale to a third party;
- Exit strategy: transfer method, timelines, distribution to succession plan participants, integration of exit strategy with wealth preservation and asset protection planning, estate planning, tax planning and retirement planning activities;
- Implementation, reviews, update, revise as required;
The process of business succession planning is an iterative process rather that a one-time event. Private, owner-managed, closely held and family-owned businesses’ models, income and assets are fluid and are continually changing. We believe that our disciplined approach to business succession planning increase the prospect of the business becoming multigenerational, enduring ownership and leadership transitions and deliver lasting value to the owner, family members, key stakeholders and to the employees and clients the business serves.
Contact a South Carolina Family Business Succession Planning Attorney in Greenville.
One of the toughest challenges a private, owner-managed, closely-held or family-owned business will face is the creation and implementation of an effective and comprehensive business succession plan. Whether you have an existing business succession plan or need to establish one, we can help. We encourage you to contact an experienced Business Succession Planning lawyer at the Dobson Law Group to discuss your options and requirements at (864)271-8171 or online to schedule an initial consultation.
The Dobson Law Group provides Family Owned Business, Private, Closely Held Business Succession Planning attorney legal services to clients in Greenville County and throughout South Carolina including Abbeville, Anderson, Cherokee, Greenwood, Laurens, Lexington, Newberry, Oconee, Pickens, Richland, Spartanburg, and Union County. We are licensed in South Carolina, North Carolina, Florida, and Georgia.