Succession planning for a Family Business is to often neglected with disastrous consequences.
We appreciate that you’ve worked hard to build your family business. So we understand how important it is to ensure its continued success, after you retire or depart the business. The most important aspects of our work is to ensure your business is profitable, alongside being well poised. And making the most of market opportunities or new acquisitions. Whether your objective is to sell the business or pass it on to the nest generation.
If you wish to sell, we work to enhance the value of the business, considering its strategy, structure, resources, and operations. We aim to position the business to take full advantage of the growth of opportunities. Ensuring it operates efficiently and is also financially sound.
The future of the business is not the only consideration. In addition, the impact on the family needs to be carefully considered.
The starting point in this discussion is the question
“What is more important, the family or the business?”
Every Family Business is different. However, it is how this question is answered that will set the scene for the following 10 critical points:
- Start early – the sooner the better
- Documents your plans, everything needs to be written down.
- Make sure that where the possible appropriate people with a vested interest are aware of the succession plans
- Who will run the business once succession occurs?
- Make sure your business is always operating as though you are trying to sell it
- Make sure you have an up to date relevant will
- Ensure you have a Shareholders Agreement if there are other existing shareholders
- Review your Succession Plan on a regular basis
- Family Trust corporate Trustees require special consideration
- Be aware of the Family Provision Act
For more detailed explanation of these critical points view the full article.
Should your succession planning involve handing the business over to the next generation, we can help create a smooth transition. By ensuring both you and your successor are comfortable with the business position, strategy and future direction. We appreciate that the legitimate interests of all parties to the handover need to be respected.
You need to consider the personal development needs of current and future leaders. Providing guidelines for governance structures, policies and procedures that will preserve the health of the business throughout transition.
We understand the complexities of transition in a family business. Therefore, ensuring the process for succession and continuance is properly planned, documented and executed.
The Family Provisions Act is particularly complicated. Some say it is a strict piece of legislation that does not sit well with many successful business owners. Even the most carefully planned, well documented plan can still be challenged by an annoyed family member. Another one for your legal advisor.