Entrepreneurs bursting with creative talents and energies are understandably focused upon business creation, not succession. Their thoughts are duly centered on things like organizational structure, optimal entity choice and gaining competitive traction in the business world.
Ultimately, though, there comes a time when such thoughts turn to matters centered more on end-game considerations rather than on an owner’s continued contributions to enterprise success. Company principals turn to proven business law attorneys for input on strategies to extricate themselves from their commercial creations, while simultaneously crafting tenable succession strategies that ensure ongoing entity viability.
Indeed, that is what business succession – the transfer of ownership interest – is all about.
And it can be done in myriad ways.
For example, many business owners simply employ the relatively straightforward tack of selling their companies outright for cash and/or other assets. A sale might feature family members as buyers, or more arms’-length participants.
Conversely, so-called “buy-sell” agreements often spotlight scenarios in which an owner retains company control until a “trigger event” dictates a power transfer. As noted in an in-depth article on business succession, that event can be many things, ranging from death or incapacity to divorce or something else.
Experienced legal counsel can also point out other alternatives to valued business clients. Many succession strategies are tied closely with traditional estate planning vehicles like trusts, annuities and gifting. A practiced commercial law attorney can discuss such possibilities in turn with a business owner, and additionally make appropriate professional referrals as appropriate.
Business succession can be every bit as exciting – and challenging – as entity formation. Getting it right can yield both a profitable outcome and help ensure the continued existence of a company.