Boca Raton Business Succession Planning Lawyers
According to Fortune magazine, approximately one-third of all companies in the United States are family businesses. These businesses are represented in all sectors of our diverse economy.
Sadly, many family businesses do not survive beyond their founders because proper planning was not in place. Additionally, approximately 40 percent of family businesses are in the process of ownership transfer at any given time, and many of those transfers fail. Below, our Boca Raton business succession planning lawyers explain how you can prevent this from happening to your company.
Why Do Family Businesses Fail?
The main reasons why many family businesses fail are lack of liquidity, lack of planning, and tax issues. Intentional and purposeful planning can help reduce the impact of these reasons for business failure and provide a smooth transfer of ownership to other members of the family.
Estate Planning for Owners of a Family Business
The biggest reasons family businesses need a transfer of ownership are disability, retirement, or death of the original business owner. Whether or not this succession is successful depends largely on how well the family has prepared for such events. In order for the family business to have the best chance of surviving the transfer of ownership and control, challenging issues must be addressed. You must consider who will operate the business when you no longer can, if your family will still be financially dependent on the company, as well as the second-generation transfer of the company.
Buy-Sell Agreements (BSAs)
Buy-sell agreements (BSAs) are legal documents that outline how ownership of the business should be transferred in the event the owner retires, passes away, or suffers a disability. BSAs are appropriate for any type of business entity, including partnerships, limited liability companies, and corporations. BSAs are also legally binding for third parties, including the owner’s beneficiaries and their representatives. Under the Internal Revenue Code, a BSA can also provide a value for the business that is binding on the Internal Revenue Service for federal estate tax purposes.
BSAs can take many different forms including an Entity BSA, a Wait-and-See BSA, and a Cross-Purchase BSA. These different types of BSAs all have their own positives, as well as their own drawbacks. It is important to speak with a Boca Raton succession planning lawyer who can advise on the type of agreement that is right for you, your business, and your family.
Our Business Succession Planning Lawyers in Boca Raton Can Advise on Your Case
Understandably, your business is extremely important to you and you want to ensure it survives any crisis life may bring. At Samuels Wood PLLC, our Boca Raton business succession planning lawyers can help ensure the longevity of your business so your family does not lose everything you have worked so hard for. Call us now at 561-864-3371 or contact us online to schedule a consultation and learn more about how we can help your business.