Business Succession Planning
Transfers to Key Employees
Business succession planning for owners of closely held businesses can take many paths. For multiple reasons, a business owner may want to sell a business to key employees. Selling a business to a family member is a complicated process. Yet in comparison to the thought and preparation that accompanies a transfer to key employees, the…
Read MoreEffective Buy-Sell Agreements Article
Privately held businesses with multiple owners present unique organizational and managerial challenges. Partners do not always agree on the business direction. Circumstances change, and people can change over the years. While most businesses wind down at some point, they are designed to be perpetual. The ownership change is inevitable as people retire, become disabled, or…
Read MoreESOPs as an Exit Strategy
When a business owner begins to consider an exit strategy, the universe of strategies includes several options: Give the business to the children Sell the business to the children Sell the business to company management Go public Sell to a financial buyer (private equity or private investor) Sell to a strategic buyer (competitor, supplier, or…
Read MoreDefined Benefit Plans for Small Businesses and the Self Employed
Retirement savings plans fall into one of two classifications: defined benefit (DB) plans or defined contribution (DC) plans. Hybrid plans, such as cash balance plans that contain characteristics of both, are considered defined benefit plans. Pension plans and Social Security are two examples of DB plans. Pension plans were once common among larger employers and…
Read MoreMaximizing The Sale Price of Your Business
When the time comes to sell a business, the owner typically wants to sell for the highest price. There are times, including the sale of the business to a family member, when the highest price is not the objective. But when the buyer is an unrelated third party, the highest price is the main priority.…
Read MoreMinority Shareholders
Succession planning often includes a transition plan for a business. Businesses commonly use one of three forms of incorporation, ‘C’ Corp, ‘S’ Corp, or LLC, though there are other legal forms of incorporation. Regardless of the form of incorporation, there are those who hold the power to make decisions for the business and those who…
Read MoreTransfers of a Closely Held Business to Family
Transferring a family-owned business to a future generation of owners can involve some complex estate planning issues depending upon the value of the business. The state and federal taxman may have an interest in any estate, gift, or capital gains taxes that may result from the transfer. The second section of this article provides an…
Read MoreMixing Business with Philanthropy
No presentation on succession planning would be complete without a discussion of post-succession activities.After building their businesses, doing the hard work to ensure a smooth transition to new ownership, and taking a well-deserved vacation, one still needs a focus in life. Increasingly, philanthropy has filled that void.Many business owners and managers find philanthropy to be…
Read MorePhantom Stock Plans in Privately Held Businesses
Introduction A phantom stock plan is a form of long-term incentive plan (LTIP) typically used by privately held businesses. Also known as simulated stock, shadow stock, or synthetic stock, these plans allow key employees to share in company growth without owning company shares. Stock Appreciation Rights (SARs) are a form of phantom stock. Phantom shares…
Read MorePreparing and Protecting Heirs
Many people who have amassed considerable wealth recognize that it can be both a blessing and a curse. Raising children in an environment of wealth, high expectations, and considerable resources present unique challenges. The prospects of transferring considerable wealth to children and grandchildren generate concern in many people of means. Examples of misspent wealth as…
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