San Antonio Business Succession Attorney
Helping Texas Business Owners Plan for the Future
Privately and family-owned businesses make up a great deal of the United States economy. They are also not limited to small companies, as some of the largest businesses in the country are family-owned. However, family-owned businesses come with certain vulnerabilities, including the question of who takes over once the founder either passes away or is otherwise unable to lead the company. A startling number of family-owned businesses fail to transition after losing their founder.
Establishing a business succession plan is crucial to the long-term health of any privately or family-owned company. A strong succession plan will define and legally enshrine your wishes on what happens to your stake in your business. Not having a succession plan can subject your business to disaster and even represent a substantial financial liability to your loved ones.
Our San Antonio business succession lawyer can help you and your business plan for the future. Discussing succession can be an uncomfortable subject, but we are prepared to offer a full suite of services to make building a robust plan as painless as possible.
Why Do I Need a Business Succession Plan?
If you are the sole or one of the key stakeholders of a privately-owned business, your presence and contributions likely make up a huge component of your company’s success. Even if your business appears to be prepared for the long-term future, it would likely not be able to function as efficiently or effectively were you suddenly not available to help run it.
Companies need to have the ability to rapidly adapt to changing circumstances. If you were to suddenly fall seriously ill, become incapacitated, or pass away, your company will need clear instructions on how to proceed in your absence. A lack of formal direction leads many companies to falter and even fail once a follower is no longer available to lead.
Even if you think you are too young or healthy for this to be a concern, remember that tragedy can unfortunately strike at any time. Debilitating injuries can occur randomly, suddenly, and arbitrarily, for example, and you need to have a plan in the event one render you unable to continue your leadership.
Identifying potential successors, nurturing talent, and careful estate planning all often have a role to play in developing a strong business succession plan. We can help identify steps you should consider and vulnerabilities that could jeopardize your business in the event of a crisis.
Build a Smart Business Succession Plan with Our Help
Whether you intend to sell your business or move to keep it operational in the years and decades to come, our San Antonio business succession lawyer at Duke Law Firm can help prepare you and your company for every eventuality. Taking proactive steps now can help your business avoid damaging delays in ownership transference or gaps in leadership. Preemptive succession plans can also help shield your loved ones from significant tax liabilities.
Our attorney has facilitated transactions ranging from $200,000 to $10 million, so we are prepared to help manage the needs of your succession plan regardless of the size or complexity of your privately-owned business. We can evaluate your goals and work to identify innovative legal solutions that will meet you and your company’s needs.
The shape of your business succession plan will depend on a number of factors, including your individual goals, your personal circumstances, the type of business you operate, its goals, and the number of workers you employ. You may seek to prepare your company for long-term continuance and growth once you are no longer available to lead it. Alternatively, you could aim to transfer your stake in the business to loved ones or colleagues, including liquidating its value.
Our San Antonio business succession attorney can help you explore numerous facets of building a robust plan, including:
- Establishing business transference protocols. When you pass away or become permanently incapacitated but wish for your business to continue operating in your absence, you will need to formalize the transference of the business’s ownership. You will need to decide who will run the business once you are gone and make sure there is legally executable documentation – which can come in one of several forms – that will trigger and facilitate a timely transfer.
- Selecting candidates for succession.If you run a family-owned business, an adult child or spouse may make the most sense to take over once you are gone. If you are involved in a privately-owned business, however, especially one with multiple partners, you should together decide who could potentially take the reins should new leadership be suddenly needed. Identifying and nurturing employees who show leadership potential is an important piece of succession planning.
- Minimizing tax liabilities.Any transfer of business ownership, no matter how cut and dry, is likely to generate some form of tax implications for the company and individuals involved. Experienced legal representation can work to limit tax impact.
- Building an integrated estate plan.If you have a spouse or children, you may want to bequeath some stake in the company or proceeds from its operations, especially if they were dependent on the company while you were alive. This can be accomplished by coordinating your individual estate plan with your business’s succession plan.
- Formalizing a buy-sell agreement (BSA). A BSA is a lifetime agreement that prompts a legal transfer of interest in a business to a willing purchaser once the beneficiary experiences some event named in the contract. Typically, relevant events include death, retirement, and incapacitation. BSAs are flexible and powerful documents that are typically safeguarded from any objections from third parties.
- Forming a family limited partnership (FLP). An FLP creates a holding company in which two or more family members can buy shares in pursuit of potential profit. Once you are ready to transfer the business (or conditions demand it), the company can be transferred through the FLP to the family member who will be taking over. FLPs tend to limit tax liabilities and shield many transfers from significant taxation they might otherwise experience.
- Negotiating private annuities. You may choose to sell the entirety of your stake in a business to a purchaser who will provide regular payments until you pass away, at which point additional payments to a person of your own choosing. This approach can help protect your assets from estate taxes.
- Naming a financial power of attorney. Powers of attorney are trusted individuals authorized to make decisions on behalf of someone when they become incapacitated or otherwise unable to communicate their wishes. It can sometimes be wise to formalize a financial power of attorney with specific abilities to temporarily keep your business operational should you become injured or ill; you can define the scope of their decision-making power.
- Selling interests in the business. If you have no desire to continue your participation in a business, you can create a plan to liquidate your stake in a company once certain conditions (like retirement, death, or debilitating injury) are met. The proceeds from liquidation can then be directed to various types of accounts to preserve them for loved ones.
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