Building a business is often about more than just generating income. While earning revenue is important, many owners want to create something they can share with their loved ones and pass on to the next generation. However, you will need to plan for this type of transition. Therefore, if you want your family to carry on your business, the time to prepare is now. Here is more on planning for a family succession.
Defining Your Expectations
When you own your own business, it can take years to perfect its processes and establish a positive reputation. Before you pass the torch to the next generation, you will want to consider the aspects of your business that you want to remain intact. It will help to take time to identify your goals for the succession, including what features, traditions, and practices matter.
Identifying the Right Principals
Running a business requires patience, hard work, and the right set of skills. Although someone may be related to you, that does not necessarily mean they are business-savvy. Further, the individuals in your direct line of succession may not want to carry on the family enterprise. Depending on your goals, you may need to leave your business interests to certain relatives and not others. Therefore, it’s important to consider your business, its needs, and who may be the best fit for the enterprise and its future.
Explaining Your Decisions
If you choose to leave some close relations out of your business succession plan, you will need to consider how this may be perceived going forward. For instance, suppose you have three sons, and only one of them has the skill set to operate your business. In that circumstance, for the business’s good, you may need to leave your enterprise or its controlling interest to one of your children rather than passing it to all of them. Depending on how your interest passes, you may not have an opportunity to explain your reasoning. Without further discussion, there could be infighting and even legal challenges.
Before developing a plan of this nature, it would be best to meet with an experienced Florida business attorney. You and your business attorney can evaluate your succession options and plan for the future. Your lawyer can also help you develop a strategy that involves working with your family and preparing for various contingencies.
Determining the Ideal Succession Method
Business successions can occur in a variety of ways. For example, you may decide it’s best to sell your business interest to a close relative. You may also intend for your entity to pass through inheritance. Further, you may intend for others to own and operate your business and for your heirs to receive profits. You should meet with an experienced business law attorney to review the available succession methods and determine the ideal approach and options for your circumstances.
Establishing the Best Legal Framework
Passing a business interest to family can be complicated, and it’s important to consider the legal implications of your decision. Anytime a business changes hands, owners will need to reevaluate their existing legal instruments and agreements. Further, adding a new party or replacing one with another will involve establishing new terms. All of these situations require the assistance and guidance of an experienced Florida business attorney. Your business lawyer can help you plan for succession and help you determine how to protect your interests and your enterprise during the process.
Contact an Experienced Florida Business Lawyer
Attorney Richard Sierra at the Florida Small Business Center assists clients like you with commercial leasing, business, and litigation matters. As always, Our Goal Is to Help You Succeed™. For an appointment, you may call us at 1-866-842-5202 or use the contact form on our website. We represent clients throughout the State of Florida, including Coral Springs, Coconut Creek, Boca Raton, Delray Beach, Pompano Beach, Sunrise, Fort Lauderdale, Miami, West Palm Beach, Jupiter, Deerfield Beach, Stuart, Port St. Lucie, Orlando, Naples, Fort Myers, Sarasota, Tampa, and surrounding communities.