Small business succession planning
Many small business owners only consider succession planning when they are approaching retirement, or have already made the decision to leave the business. But life is full of unexpected events, good and bad, and having a well thought out succession plan in place can be invaluable to reduce disruption and ensure your preferred outcome if your circumstances change.
1. Review how you own the business
Your ownership arrangements will affect your business succession plan. Are you the sole or joint owner? What is your legal structure? What do your ownership documents say about succession? Your articles of association, partnership agreement or other ownership documents should set out your rights and obligations if you leave the business, so start by reviewing these.
2. Think about what you would like to happen in different scenarios
Succession planning isn’t just for retirement; there are lots of reasons that you might step back or leave a business, including changing career or following new business opportunities, taking time out to start a family or care for relatives, and unforeseen events such as illness, injury or death.
3. Discuss your plan with others
If there are other owners of the business, start an open conversation about succession planning. If you have a successor in mind, consider involving them in the planning process. It is also a good idea to discuss your plans with family, or any beneficiaries of your will, so that they understand your wishes and know what to expect.
4. Seek specialist advice
A commercial lawyer will give you expert advice on business matters such as changes to legal structure and agreements, types of business sale, arrangements for employees, property, business continuity and liability. A specialist private client lawyer can advise on wills, estate planning and inheritance tax, and lasting powers of attorney for business owners.
At Cartridges Law we provide commercial and personal legal services for small business owners. Contact us for an initial conversation with a member of our private client team.