Telephone:  02  9601 7900

Address:     Suite 1, 16 Norfolk Street, Liverpool  NSW  2170

BUSINESS SUCCESSION

Are you a part owner in a business?

Have you considered questions like…

• If you died, what would happen to your share in the ownership of the business?

• Who will run the business?

• If your business partner died, could you get enough cash to buy his or her share, or would have to manage the business with their spouse or child?

• Where’s the money coming from? Will it be taxed?

• How will your family be looked after?

A 2004 Monash University report cites a university survey finding that about 70% of family business owners thought succession and retirement planning was important, but only 12% had a documented plan! (emphasis added).

Which statistic do you fall into?

The purpose of having a plan is to arrange your business affairs to ensure there is little or no loss of continuity in your business should you or one of your co-owners or important personnel die or leave through illness, accident or death.

If you’re the one who’s injured or dies, you want to ensure your family is not financially burdened.

In your overall plan, you’ll need to consider:

• The assets of the business. The departing owner (or their estate) should be fairly compensated for transferring their rights to the business. This is usually achieved by having a buy-sell agreement, or a business succession agreement

• Insurance to cover liabilities such as for loss of key personnel, loss of goodwill, to pay out the outgoing partner’s share, and/or to pay debt that otherwise would be difficult to pay; and

• Planning in respect of your personal estate, for example by a power of attorney and by Will.

Sounds hard? It shouldn’t have to be. If you need advice about your business, call us for more information or to see if we can help you.
 

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