Many employees in Moorestown work for small businesses, including many who work within a sole proprietorship or a family-run enterprise. When a business owner is unable to care for their own affairs due to health or death, it may jeopardize the welfare of their employees or dependents.
The unexpected death of an owner may leave the future of the company in doubt. Without a valid business succession plan, the ownership of a company may be distributed without regard for an owner’s wishes or the beneficiaries’ ability to run the business.
A Moorestown business succession lawyer may help craft a business succession plan that meets your needs upon incapacity or death. With assistance from a qualified trust and estates attorney, a well-drafted plan can provide stability and certainty for your family, business, and employees.
Legal Requirements for a Business Succession Plan
A succession plan forms a vital part of any business arrangement. In essence, it is very similar to a will with instructions for what an executor of an estate must do if an owner cannot care for their own affairs through death, disability, or retirement.
The written document that serves as the succession plan must state in clear terms what it is that the owner wants to happen. It may also be useful to sign the plan in front of witnesses or a notary to leave no doubts about the intent of the signer.
These plans should be as specific as possible in order to clear up any confusion regarding any part of the business. For instance, these plans often must consider taxes, the sale of assets, the payment of life insurance, and even the valuation of the business. A Moorestown business succession attorney could help draft a comprehensive document that addresses all of a business owner’s desires and concerns.
Potential Options for a Business Succession Plan
Perhaps the most common option included in such plans is an instruction for the executor of an estate to sell a decedent’s shares in a company back to a co-owner. This executor can then use the proceeds to benefit the decedent’s family.
Another common option is to designate an heir to take over the shares in the company. This may be anyone that an owner chooses, regardless of that beneficiary’s competency or prior engagement in the company.
Finally, a succession plan can mandate that the executor sell the shares back to the company itself, resulting in proceeds that accumulate in the decedent’s estate. A business succession lawyer in Moorestown could help evaluate various succession options and find the one that best fits the needs of a small business owner.
A Mooresville Business Succession Attorney Could Help Provide Certainty for the Future
Business owners often take an active role in the day-to-day activities of their companies, but the time may come when you are no longer able to do so. Whether the result of voluntary retirement, a disabling condition, or even premature death, it may be essential to leave a detailed business succession plan that outlines your wishes for the future of your company.
A Mooresville business succession lawyer may be able to help you document the value of your company, evaluate your stake in it, and document your goals for its future. They may also be able to help with concerns about the validity of a current plan. Call today to learn more.