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5 tips for business succession planning

On Behalf of | Jun 17, 2022 | Business Law |

You cannot run your company forever, and even if you could, you might not want to. Hence, unless you are happy for your company to stop when you stop, you need to put a succession plan in place so that someone else can take over.

There are several advantages to this:

  • It can provide you with an income
  • It can provide your heirs with an income
  • It can provide your employees with an income

As death or illness could strike at any time, putting a plan in place now ensures you are prepared. You can alter it as you see fit over time. Here are some points to consider:

How will you transfer it if you need to?

Just leaving someone a business could come with massive tax implications: A bit of forethought can reduce the chance of this.

Who can ensure it keeps running?

If you are the only person who can sign documents, or make payments, consider getting a backup plan immediately. Even a few weeks in a coma could be enough to bring business to a halt if no one else can perform these actions.

Who knows how to keep it running?

Signing checks and documents is essential, yet so are all those other little things you do on a day-to-day basis. You need to ensure people know how to run the company in your absence and that they know who has the authority to make decisions. There is no point in having five managers who know what you would do, but none of them has the authority to make the call.

Legal help is wise at all stages of your business to help you ensure you prepare for all scenarios.