If you own a family business, retirement isn't simply a matter of deciding not to go into the office anymore.
You've got some critical questions to answer like:
- What happens to the business when I’m no longer running it?
- Will I have enough money to retire?
The family dynamic can complicate the whole transition because of the relationships and emotions involved. Many people are not comfortable discussing topics such as ageing, death, and financial affairs, and consequently postpone the issue.
Succession planning should be a priority for any family or closely held business considering that more than seven out of ten family-owned businesses fail to survive the transition from founder to second generation – typically falling prey to lack of management skills, estate duties and other taxes, or family discord.
Developing and implementing a well-designed succession plan is essential to the survival of a family business from one generation to the next, or to new owner managers.
We can assist you with these key issues:
- Are you going to pass the business on to your family or sell it to a third party? The advantages and disadvantages of each of these options need to be considered.
- Management and ownership are not one and the same. You may decide to transfer management of your business to just one of your children, or to outsiders, but transfer equal shares of business ownership to all your children, whether they're actively involved in the business or not.
- The tax burden when transitioning a family business can be significant. The challenge is that a family business is not generally a liquid asset, but taxes are typically due when ownership is transferred.
- Transferring family ownership often adds a tremendous amount of stress to individual family members. We can facilitate discussions with family members to explain values, rights and responsibilities attaching to the business.
Once we understand your views on the key issues above, we begin constructing your succession plan focusing on:
- Valuation of the Business
- Business Restructuring
- Tax, Estate Duty & Capital Gains Tax Consequences
- Retirement Projections
Through proper consultation and planning, you can ensure that the wealth you have built up over a lifetime is not dissipated on your retirement.