5 Tips for Succession Planning in Family-Owned Businesses

Business succession isn’t the only decision you have to make as you plan the future of your company (or your family!), but it’s one of the most important. These five updates from lawyers and law firms on JD Supra will help you understand your options»

1. Succession: Is Keeping the Business in the Family Necessarily the Best Course? (Ronald Adams):

Statistically, family businesses comprise 80-90% of all U.S. companies. Unfortunately, according to the Family Firm Institute, over the next five years nearly 40% of those businesses will be passing to the next generation without effective exit planning in place. Read more»

2. Business Succession Planning (Fred Randhahn):

When developing a succession plan for your business, you must make many decisions. Should you sell your business or give it away? … structure your plan to go into effect during your lifetime or at your death? … transfer your ownership interest to family members, co-owners, employees, or an outside party?” Read more»

3. Family Business update: the perils and pitfalls of “Keeping it in the Family” (Richard Milner):

It is inevitable that when an individual or a family has devoted a lot of time and effort in developing their business or enterprise, they will wish to pass on the fruits of what they have achieved to the next generation. …  But any desire to benefit the next generation through a seamless succession is meaningless without careful planning. Read more»

4. Window of Opportunity for Business Succession Planning (Fox Rothschild):

The 2010 Federal Tax Act created a short window of opportunity for business owners to plan for business succession from senior to junior family members … but only until December 31, 2012. Read more»

5. Planning to Pass the Baton: Family Wealth Transfers (Manatt, Phelps & Phillips, LLP):

Many investors and business owners who wish to transfer family investments or a family business to younger generations do so through the formation of a family limited partnership (FLP) or similar entity. Read more»

—-

Follow Business Law Updates on: LinkedIn | Twitter | Facebook | JD Supra