Chandler Business Succession Planning Attorneys

Helping Clients Develop a Strategic Plan for Their Business Succession

Successful businesses are always planning for the future. And while launching your own small business or family business may take a lot of planning and attention, planning for the eventual business succession is also vitally important. Whether you plan to pass on your business to the next generation or family members after you retire or pass away, or you intend to leave your business to a business partner, it’s never too early to plan for business succession.

While business owners can make plans to retire or not, those same owners do not get to decide unforeseen circumstances like disability or death. Ultimately, none of us know what the future holds, and tomorrow is today before we know it. When the unexpected happens in life, and we are forced to retire early, relinquish ownership to a business due to incapacitation, or pass away unexpectedly, do you have a plan in place for who shall be the next owner of the business?

Succession planning in Arizona is a complex process that is often overlooked by business owners, whether they are large business owners, small business owners, or family-owned businesses. When the owner or key employees leave an organization due to disability, death, or other reasons and there is no plan in place, things can get out of hand very quickly. A comprehensive business succession plan allows leadership to maintain control of the company, regardless of the changes that they may face over the years.

What is Business Succession Planning?

Business succession planning involves developing a comprehensive strategy for what happens when the owner of a business retires, is left incapacitated, or dies. Your business succession plan is developed to establish a step-by-step guide for what to do in order to ensure a smooth transfer of ownership. These types of plans are especially important for small and family-owned businesses and should be included as part of a thorough estate plan.

With proper foresight and planning, it is possible to ensure that a business organization continues to function long after the owner’s exit or demise. It is essential to focus on methods that minimize cost, provide some level of asset protection, and shield against fighting or litigation among partners and family members.

Our legal team has years of combined experience representing estate planning cases involving business succession planning. We would be proud to represent your interests and the interests of your family members in planning for the future.

What Risks Might You Face if You Do Not Have a Business Succession Plan?

When a business succession plan is not properly developed for small and family-owned businesses, dire consequences can result.

Common risks of going without a business succession plan include the following:

Diminished value of the business.
Loss of skilled employees.
Loss of trust among clients and customers.
Potential for conflict and infighting.
Unqualified new leadership taking control.
Vulnerable to direct competition.

Schedule an appointment with our legal staff to discuss the importance of developing A comprehensive business succession plan today.

What Are Different Types of Business Succession Plans?

There are different types of business succession plans, each suitable for different types of circumstances.

An emergency succession plan should be developed for sudden changes in business ownership. For example, if the company owner dies quite suddenly, the business could begin going downhill just as quickly. An emergency succession plan considers interim measures while longer-term plans are developed, such as appointing an acting successor to the leadership role.

Long-term succession plans involve proactively planning for the future and the future of the company. These plans detail the eventual transfer of ownership, such as when the owner retires, steps aside, or sadly passes away. Long-term succession plans frequently require developing talent over an extended period of time to prepare employees to step into leadership responsibilities. Long-term business succession plans should be updated regularly based on the company’s changing needs.

What Are the Key Elements of Every Arizona Business Succession Plan?

Key elements for a comprehensive business succession plan in Chandler, AZ, include the following:

Financial planning should be conducted with the help of financial advisors to help determine that the business is on its way to meeting its financial goals.
If your business is family-owned, you need to address what governance looks like.
Ownership and leadership transition should be detailed in multi-year strategies.
Strategic planning explores the current state of the business and its future plans, including reviewing potential risks.
Successor identification must be completed. The successor could be a family member, an employee, or a third-party outsider.

What Documents and Information Might You Need for Effective Succession Planning?

A comprehensive business succession plan usually involves several pieces of important documentation.

These include:

A management buyout plan allows management teams to buy the company if they choose.
A member’s agreement for an LLC or a shareholder’s agreement for a corporation addresses ownership of the business in the tragic event of incapacity or death of its owner.
Appraisals and business valuations.
Buy-sell agreements, which enable surviving partners to purchase the deceased partner’s shares.
Employee stock ownership plans, which would allow employees to purchase departing owner’s interests in the company.
Estate planning documents for all individual business owners and family-owned businesses.
Partnership agreements for partnerships, operating agreements for LLCs, and by-laws for corporations establish day-to-day management of the business and identify permissible business leaders.
And entity purchase agreements, where a company takes out insurance policies on each controlling partner so that, in the event of tragic passing, the insurance payout can be used to purchase the deceased partner’s shares.

What is the Role of an Estate Planning Attorney in Business Succession Planning?

As the owner of a family-owned business or other small business, you work every day to right and prolong your great legacy. In your plans for the future, you need to consider business succession planning, which requires hiring qualified professionals to assist you. We recommend hiring a financial advisor, a highly skilled accountant, and an attorney.

As your legal representatives, our lawyers can help analyze the corporate structure, identify potential liabilities to the company, handle estate planning, and develop a comprehensive business succession plan.

Schedule a Free Consultation with Experienced Arizona Business Succession Planning Lawyers Today

Our estate planning law firm has extensive experience representing clients in business succession planning, whether they are small businesses, family businesses, or large businesses. With our legal representation, we aim to assist you and your employees, partners, and family members in making sure that your estate plan has the tools in place to make business succession go smoothly for the company.

Metropolitan Law Group offers free consultations to prospective new clients interested in retaining our legal services. To learn more about how we can help you develop a business succession plan, please get in touch with our Chandler law office to schedule your free initial consultation today. 480-405-1970.