You have put in hundreds of hours to build your Georgia-based business from the ground up. As you near the age of retirement and start planning your estate, have you thought about whom you can turn your company over to?
The American Bar Association breaks down a few business succession considerations. Mull them over as you take your company to the next level and get your affairs in order.
Buy-sell agreement
Maybe your adult children also act as employees to your business. If so, setting up a buy-sell agreement to handle succession may make the most sense. That way, when you pass, or if you become incapacitated, the remaining owners have to buy your shares. To make it easier for your children to afford your shares, you can use a life insurance policy.
Independent manager and owner-manager
If you feel that you do not have viable candidates to take over your business, you can choose an outside third party to become an independent manager. This is worth noting because a business owner does not necessarily have to act as the business manager. On the other hand, there are also owner-manager businesses, wherein the business owner also manages the business. It is up to you to decide which operation style fits best.
Taxes
Be sure to consider estate and gift taxes with your business succession plan. Gradually relinquishing control of your company over the years can help reduce the cost of estate taxes. You can talk with a CPA or financial advisor about how to minimize taxes as much as possible.
Ease your worries by working on your business succession plan now. Being proactive may better ensure an easier transition for you, your employees and your family.
