Business Succession Planning
When you run a business, it is essential to have the correct paperwork to protect you, your family, and everyone involved with your company. This applies at any time but is more important than ever when someone in the business dies.
A business succession plan helps with the administration following death and ensures your estate passes to your intended beneficiaries. We can advise at every step of the way whether you are setting up a business or are well-established.
If you run a business with a partner and neither of you has anything written down about what happens on your death, consider the possible scenarios. What happens if your business partner’s spouse wants to take their place in the business? Would you be happy with that? Would it be viable? What if they want to sell their shares? Would you be able to buy them out?
Having the correct paperwork in place means you know exactly what will happen and are not left facing difficult decisions at an already stressful time.
Wills for everyone in the business
Firstly, we make sure that everyone in the business has a will. We review any existing wills; if no changes are needed, there is nothing to pay.
It’s worth noting that the cost of writing a will and business succession planning documents is tax-deductible, so there is no excuse for not doing so!
If anyone in the business does not have a will, we will help to write one.
Business Succession Trust
The next step is to prepare a business succession trust. This sets up what the business owner wants to happen in the event of incapacity or the death of any key person within the business. The process varies slightly depending on how the business structure, but applies equally to:
- Sole traders
- Limited Companies
- Partnerships
- Listed Companies / PLCs
- Family-run businesses
Outside of the estate planning industry, Mark Layzell has a wealth of business knowledge and is well-placed to advise on all aspects of setting up and running a company. He can assist with
- Business process mapping and improvements
- Identifying opportunities for new or improved ways of automating processes
- Company, department, or key person succession planning
- Change management
Together, Legacy Matters will help you put all the necessary documents in place to streamline your operations and protect the business for the future.
The five-year survival rate for businesses born in 2015 was 39.6%
There are many reasons why companies go out of business, including:
- Financial Instability
- Retirement
- Relocation
- Mental or Physical Health Issues
- External Economic Factors
- Shiny Object Syndrome – jumping from one thing to the next
- Lack of Business Plan or Poor Planning
- Conflict
- Death
Business succession planning can help you mitigate all the above and give your business the best chance of survival.
It is often things that are outside your direct control that affect the viability of a business; for example, do you rely on one supplier for more than 10% of your business income? What would happen if that supplier stopped trading?
Similarly, what about your customers? Are you over-reliant on one company?
Business succession planning helps you to consider all eventualities.
Once plans are in place, we will review them every 2 to 3 years to ensure they are still appropriate for your needs.
Business succession plans give you peace of mind, but they can also improve the profitability and tax efficiency of the business. Now that must be a win-win.
Want to learn more about business succession?
Book a free call with one of our experts to see how we can help you protect your business.
From our Cambridge office, in your own home or online, we’re ready to help you in the way that is best for you.