Business Transition is a term used to refer to a change in a business’s status or business ownership. Whether your business is growing, acquiring new ownership or management, or closing its doors, it’s important to be ready for the future. Here is more on preparing for a business transition.
What Does it Mean to Have a Business Transition?
A business transition can be defined as any change in management, ownership, or existence of a business. These developments can occur under a variety of conditions. For instance, a family business may be passing from one generation to the next. Shareholders may be selling controlling interests in a corporation. The development may also be because partners have decided to end their business relationship or add another party. There can also be a transition due to an owner’s death or divorce.
All of these circumstances can be complicated, especially if the right planning documents have not been put in place. The good news is that by working with an experienced business attorney, you can help ensure that you have the right measures to prepare for your transition.
Operating and Partnership Agreements and Other Transition Documents
In Florida, many companies choose the limited liability company (LLC) as their business entity. LLCs typically have operating agreements that outline the roles and responsibilities of their members and have terms that address potential business transitions. Likewise, Florida partnerships have agreements with the same type of language.
Florida corporations have bylaws and shareholder agreements that will also include specific actions the entity must take during a business transition. Having documents properly prepared and in place can help make these changes less complicated and easier to complete.
How to Prepare for Your Business Transition
As indicated above, you will want to work with an experienced Florida business attorney when planning for your entity’s future changes. You will also want to have instructions accessible to others in your organization. Your transition plan should include information concerning your operations, employees, clients, contracts, accounts payable, intellectual property, and other important details. You may also need to consider making changes to your advertising and website.
Are Your Winding Up Your Business?
In some situations, the transition will involve owners winding up their businesses. This generally means they are ending or closing the enterprise. Your business’s corporate governance documents should identify the steps and tasks that will need to be completed. If your enterprise does not have these instruments in place, Florida law will impose certain requirements.
The windup process typically involves ensuring that accounts receivable and payable are managed and resolved. There may also be outstanding payroll and creditor issues that will need to be addressed. Depending on the circumstances and type of entity, the responsible parties may need to file an annual report and other documents and hold a formal meeting to effectuate the transition.
Business transition can occur in many ways, and it’s important to be prepared and to know how to protect your interests during the process. The best way to identify the possible changes your business may face and plan for the future is by working with an experienced Florida business attorney. Your business lawyer can help you evaluate your enterprise, consider potential issues and contingencies, review your options, and establish appropriate protocols.
Contact an Experienced Florida Business Attorney
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.