Succession Planning

CAPITAL TRANSFER

Succession Planning is commonly treated as working through who is going to run the business.  This decision focuses on whether it is it to be someone in the family or a professional executive specifically recruited for the purpose. This is a very important issue for business owners to resolve.

However, another critical aspect is often overlooked - how to accomplish the transfer of capital to the next generation especially where either some or no members of the next generation are likely to be involved in the running of it.

A simple question for a retiring owner to ask, is what would happen if I died?

If the answer is the business would need to be sold to provide funds for my spouse and / or distribution to family, who would do the selling?  Would it be your executors, your accountant, your spouse or your children?   Would this achieve the best value or be at a “fire sale” price?                     

An alternative to consider is whether the owner would optimise the value of the business by using a period of time prior to retirement to draw on industry expertise and contacts to ensure a smooth transition of both management and capital.

This is a scenario we are pleased to discuss with you.