Business structuring and succession planning for family businesses present unique challenges. A family business is essentially an interaction between two separate but connected units — the family and the business. Each unit has different rules and boundaries that must be considered to create a successful plan that protects family unity as well as the future of the business.
A Proactive Approach Is Essential
Did you know that only 15% of family-owned businesses have a succession plan in place? And, even among those that have a plan, a lack of attention to detail often leads to disaster. By the fourth generation, just 3% of all family-owned businesses are still in operation.
Think of your business succession plan as a form of insurance for your company. It outlines your own exit strategy for when you wish to retire and pass on control of the company to the next generation. It also creates a contingency plan for the day-to-day operation of the business in the event of your death or disability. When your business succession plan has been created with the unique needs of your company in mind, it ensures you’re prepared regardless of what the future holds.
How Morris Law Group Can Help
No matter how close your family is, there’s great value in obtaining an outsider’s perspective on business structuring and succession planning. Consider the following:
- The way family members typically communicate with each other is often not appropriate in a business setting — especially when personal disputes are allowed to cloud professional judgment.
- It’s difficult to evaluate the skills and qualifications objectively of close family members or to determine if they are being paid fairly.
- Older family members who’ve been involved in the business for many years may resist change and not want to take the risks that are needed to help the company continue to stay competitive.
- The interests of non-family employees must be considered in addition to the goals of family members currently involved with the business.
That said, the legal team at Morris Law Group has significant experience serving the unique needs of closely-held businesses. We work with business owners to:
- Plan an exit strategy. If you’ve decided it’s time to think of moving to the next chapter of your life, we can formulate personalized plans for exiting from your business or transferring ownership and control of the business from one generation to the next.
- Prepare vital documents. Shareholder and partnership agreements and corporate reorganization plans are key to the ongoing success of your business. Our attorneys will thoroughly research your company and its needs to ensure that your interests remain protected.
- Solve liquidity issues. Liquidity is often a challenge in a family-owned business. When you’re struggling to come up with the resources to meet your financial obligations, we can help.
- Minimize overall tax liability. No business should be paying more in taxes than what is necessary. Our attorneys can use a variety of tools to help you defer the transfer taxes associated with handing down your family-owned business.
- Structure stockholder buy-sell agreements. A buy-sell agreement is essentially a prenup for your business. Instead of explaining what happens in the event of a divorce, however, a buy-sell agreement explains what happens to a co-owner’s interest in the company in the event of disability, death, or disassociation.
- Plan for retirement. We work with clients who have accumulated balances in their retirement plans and Individual Retirement Accounts (IRAs), providing advice on how to maintain their desired standards of living.
Schedule a Consultation Today
At Morris Law Group, we’re committed to helping you leave a legacy for your loved ones that includes the ongoing success of the family-owned business you’ve worked so hard to build. You deserve a smooth, stress-free transition — and we can help you get there.
We have four convenient offices in South Florida, including our headquarters in Boca Raton, as well as locations in Aventura, West Palm Beach, and Weston. Schedule your consultation now.