Many of our clients own their own business. This is a major part of the legacy they wish to leave to future generations. In order to make sure that the business can be passed on and future generations continue with the success, a business must have two essential strategies in the right place. First, the business must have a solid legal foundation to ensure it can grow. Second, the business and business owner must have a succession plan in place to make sure any transfer is handled according to the owner’s wishes.
Telling family members and business partners about your wishes for your practice is not enough – you need a dedicated estate planning attorney to put those wishes on paper. A St. Charles County business succession and planning lawyer could explain the best actions for your enterprise and help you account for the entirety of your valuable company.
The attorneys at Polaris Law Group will sit down with you to create a strategy for your business formation the moment you have that next great idea. We can help identify the best strategy to fit the needs of you and your business. This may be incorporation, forming a partnership, or an creating an LLC. Then, we will help show you and advise you through the many complexities beyond simply filing the proper papers with the Secretary of State. These can include:
- Buy/Sell Agreements
- Operating Agreements
- Corporate Bylaws and Resolutions
We will look at your entire legal framework to make sure the business is built on a solid foundation from which to grow.
What is Business Succession Planning?
The concept of business succession refers to what happens to a company after an innovative entrepreneur decides to retire. From the business’s inception, that owner should consider retirement day and create a plan for business succession. Who will run the business? How will it grow and diversify? Will the founder exit through a buy-sell agreement?
Steps a Business Owner Should Consider in Succession Planning
When beginning the process of succession planning, a knowledgeable St. Charles County attorney would ask about the business owner’s objectives, including whether they wish to pass the business down to family members or sell to a third party and use the money to fund retirement goals. This is known as an exit strategy.
Additional steps a business owner should take if the company is to remain in the family or be sold to a third party include:
- Sharing objectives with family members and discuss roles anticipated for each one to make sure they agree and are willing to further the venture
- Coming up with a protocol for dispute resolution and how an owner’s interest should be represented
- Discussing with estate planner the tax ramifications of disposing of or selling a business, including if shares will be gifted to family members
- Preparing buy-sell agreement to memorialize how the business should be sold, if applicable
- Determining if the vehicle under which the business operates is the best choice for longevity
- Determining the most advantageous valuation method for the company, adapted over time as the company grows
- Considering creating a revocable trust so business assets pass to family members
Meanwhile, a business owner will also want to address what will happen if they become too ill to perform their job duties or how a court might treat the business if there is a divorce.
Each business owner’s situation is unique and planning for business succession should be part of preparing for retirement. One of our proactive team members could help a person or family get started as early as possible.
Buy-Sell Agreements as Key Options
Unfortunately, many family businesses end up dissolved by the second generation because relatives do not want to carry them on. Therefore, business owners may want to consider that a third party is the best way to ensure their legacy continues to operate. A buy-sell agreement is the perfect tool for making this happen. Under this framework, two parties agree on the arrangement and outline the procedure for valuing and buying a departing owner’s share.
Implementing a buy-sell arrangement can be challenging for people who have never encountered this system, but a dedicated St. Charles County lawyer could help someone factor this option into their business succession plan.
Accounting for Real Estate Succession
If you are an owner of rental property, there are many legal variables which need to be discussed with a qualified and experienced attorney. We help rental property owners, protect personal assets, create a specific succession plan for the property, and create a strong legal foundation. We want to make sure that dream rental property does not turn into a nightmare for you and your family.
The attorneys at Polaris Law Group are experienced and qualified business law and business planning attorneys. We are dedicated to providing proper legal advice to businesses looking to create a strong legal foundation and lasting legacy with their business. We help business owners throughout Missouri, St. Charles MO, St. Peters MO, O’Fallon MO, Chesterfield MO, Lake St. Louis MO, St. Charles County, St. Louis County, and surrounding areas.
Contact a St. Charles County Business Succession Attorney About your Options
Estate planning includes making sure you have enough money to enjoy retirement or pay for any necessary medical care, but it also requires having a concrete plan for your valuable assets.
Your business could be your biggest asset, and odds are that you want to keep your company alive after you retire. Our St. Charles County business succession planning lawyers understand your needs and could draft a plan for you. To get started on this next chapter of your life, reach out to us today.