What is a business succession plan?
A business succession plan is a mechanism for disposing of a business owner’s business interest following a major life event, such as retirement, disability or death. The plan’s overall goal is the transfer of the owner’s business interest without damaging the business’s operations, impairing the financial security of the owner’s family or paying too much tax. A business succession plan is usually found in a number of different places. One place may be the business owner’s will. However, a will, because it speaks at death, can only deal with a portion of the plan. Other documents that may contain portions of the plan are buy-sell agreements, shareholders’ agreements, partnership and operating agreements, and trusts. Remember, the succession plan can take affect during a number of major life events. Death is only one such event. Why is a business succession plan so important? The reasons are too numerous to name briefly, but think about some of the consequences that could happen to a bu
