A Plan For Your Business
Over forty percent of businesses in the United States will pass ownership to the next generation within five years. A business succession plan takes into account management succession, liquidity planning, tax issues, employee benefit planning and estate planning. Tools used in succession planning include the following: lifetime gifts, installment sales, private annuities, recapitalization, and charitable trusts.
Which tools are right for a particular plan depends in part on the structure of the business, the identity of current and future owners, and the owner’s objectives. For instance, the installment sale is a popular tool for transferring interests in a family-owned or small business enterprise when all family members are not involved in the business or the business is being transferred to a member of the management team who is not a family member.
One of the most important things to remember about business succession planning is not to delay.