Business Succession Planning Attorneys in Murfreesboro, Tennessee
For a business owner, there is nothing more important than growing their business and maximizing the value of their company. However, there are certain events that may derail a business. These events include the death, incapacity, or retirement of the owner. Often, these events occur unexpectedly, which is why a business succession plan is necessary to ensure that a company runs smoothly even in the event of unforeseen and sudden events.
A business owner should reach out to a skilled attorney to guide them through business succession planning while addressing the objectives and long-term goals of the business. At McCarter | East PLLC, our knowledgeable business succession planning attorneys in Murfreesboro, Tennessee, help business owners establish an enforceable plan to protect the future of their businesses.
Why You Need a Business Succession Plan
For any business owner, it is imperative to plan ahead in order to ensure the continued operation of their business, no matter what happens to the owner or leadership. Business succession planning is necessary to keep the business operating smoothly even if the owner retires, becomes incapacitated, or dies.
A comprehensive succession plan should accomplish the following:
Ensure that the business ends up in the right hands if something happens to the owner
Account for the unique goals and objectives of the business
Ensure a smooth transition of the business
Minimize taxes and liability exposure
Protect business assets
Developing a comprehensive business succession plan requires careful planning and a thorough analysis of the business structure, assets, and other underlying elements. For this reason, a business owner might want to consider hiring an experienced business succession planning attorney to help them develop a successful plan tailored to ensure a smooth transition and eliminate any disruptions in the business operations.
Types of Business Succession
A comprehensive business succession plan should outline the manner in which the business will pass from the owner to another person or entity in the event of the owner’s retirement, disability, incapacity, or death. Depending on the owner’s objectives, needs, and goals, there are five types of business succession plans to choose from:
Sell the company to a co-owner. If the business has two owners, the owners could make a business succession plan allowing one co-owner to purchase the other’s interest in the event of that partner’s retirement, incapacity, or death.
Pass the business to an heir. Often, business owners choose to transfer ownership of their company to an heir in the event of their retirement, incapacity, or death. This option is ideal for owners who want to keep their business within the family.
Sell the business to an employee. Another option for business succession is selling the company to a key employee. The selected employee is usually someone who earned the owner’s trust and understands the business structure and its procedures.
Sell the company to an outside party. If the business owner does not have anyone they would want to manage the company’s affairs (no co-owner, key employee, or heir) in the event of their incapacity, retirement, or death, they may agree to sell their business to an outside party.
Sell shares back to the company. If the business is owned by multiple people, the shares of the owner who retires, dies, or becomes incapacitated can be sold to the surviving owners.
There are many factors business owners should consider when choosing the right path for business succession planning. A consultation with an experienced attorney can help you understand your options.
What the Plan Should Include
A business succession plan should be a detailed and legally binding document that contains clear instructions regarding business transition. A comprehensive business succession plan should include a list of potential business successors, the valuation of the company and its assets, a timeline, a funding plan, and other elements.
Each business is unique, which is why the documents and elements a succession plan should include depend on the type of the business, its structure, the owner’s preferences and long-term goals, and many other factors.
Business succession planning requires a broad knowledge of the law, careful consideration, and a clear vision for the future of your company. For this reason, it’s important to get in touch with experienced business succession attorneys in Murfreesboro, Tennessee, to ensure a successful and continued operation of your business.
Business Succession Planning Attorneys in Murfreesboro, TN
At McCarter | East PLLC, our knowledgeable attorneys take a personalized approach to business succession planning. With an office just a few blocks away from the courthouse, our law firm helps business owners in Murfreesboro and Berry Hill make smart decisions regarding business succession. Get a case review with our business lawyers to discuss your unique situation.