Transfers Of Assets To Successor(s)
The Planning Process
Developing A Succession Plan
Why Choose Our Firm?
Transfers Of Assets To Successor(s)
If you plan to transfer ownership of your business, you will want to ensure the financial security of your retirement. as well as the continued well-being of the business which is the funding vehicle. It is important to have a succession plan for the following reasons:
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you plan to retire but have no immediate successor.
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your designated successor needs more training to operate the business effectively
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your retirement plans have changed
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your designated successor lacks the financial resources required to keep the business running
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Proper planning for business succession will ensure the continuation of operations with minimal disruptions because of our tax, business valuation and business expertise. We are capable of creating an all inclusive plan for successfully passing of your business to the next owner, with minimized tax consequences.
The Planning Process
Planning for business succession usually begins with a preliminary evaluation. We gain an understanding of the business and determine whether the succession plan will meet the real objectives of the business & its owner(s). We will research the history & operations of the business. The engagement may consist of client and key personnel interviews, review of financial statements & tax returns. We will also review other relevant documents including trust agreements, wills, shareholder, buy-sell agreements, and partnership agreements.
Developing A Succession Plan
There are four basic stages involved in developing a business succession plan. We possess requisite knowledge and experience to create a plan that is both workable & economically feasible:
- Fact Finding
We collects information through interviews & the review of Company documents to understand the goals of the owner, the owner's family members, key employees, & the business itself. Specifically the following items need to be examined.
Documents
Interviews of appropriate people and review of important materials.
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Financial statements and tax returns |
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Industry data and trends |
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Company's business plan
Owner's Information
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Specific ideas about succession |
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Opinions on family members |
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Strategic plans |
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Timetable for succession
Family Information
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Background and potential successors |
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Family agreements |
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Job descriptions and compensation agreements
Key Employee Information
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Feedback on current performance and future potential to business |
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Assessment of capabilities of potential successors |
- Succession
Herein, we considers a number of possibilities with regard to the individuals involved & the advantages & disadvantages of each alternative in terms of business growth.
Some of the most common alternatives:
A Plan For Family Succession
The older generation strongly desires that the younger family members continue to control and operate the business. If training is needed, a CEO can be installed temporarily until the designated family member can properly manage the business.
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Sale To Key Employee(s)
The employee(s) need to have the financial resources to acquire the business as well as the management capabilities. Any potential conflict among employees should be resolved.
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The Establishment Of An Employee Stock Option Plan(ESOP).
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Each year the company contributes a portion of its earnings to the ESOP to enable employees to buy a percentage of the Company's stock.
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The Installation Of A New Ceo.
To retain ownership, a board of directors is created to select a CEO to run the business. This can be useful if the owner believes the value of the business will significantly increase.
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- Communicating Findings & Recommendations
Thru fact findings we form the basis of recommendations for action or we may help the you reach a decision.
- Implementing The Succession Plan
We work with the CEO and/or key personnel to develop a detailed succession plan with milestone dates. We monitor the implementation schedule & act as a liaison between your client and other parties, including bankers, attorneys, investors & family members, in the follow-thru and the training per formulated plan.
Why Choose Our Firm?
We are CPA's, Financial Planners & our owner is a CVA, ( licensed business valuer).
Developing a succession plan requires an analysis of various data on your operations, finances & objectives & the management capabilities of family members. Based on our broad background and expertise in multiple financial and business matters, we are particularly qualified to guide you through each stage of succession planning.
Do to our simultaneous view of your succession needs, by one person, with multiple licenses and business expertise we can help you:
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Gather necessary background information on the company and conduct interviews.
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Clarify your goals and those of key employees.
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Interview and evaluate potential successors.
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Analyze alternative succession plans to determine their advantages and disadvantages.
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Develop a written succession plan and document the necessary skills to operate the business.
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Plan a succession training program in advance of the owner's retirement.
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Create a contingent plan for unexpected situations.
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By blending our expertise in business valuation, financial planning, tax & business matters with your company's goals, we can facilitate an orderly transfer of ownership & mgt. of the company, as well as minimize the amount of estate taxes due. Due to our licensed business valuation skills our firm can also help you obtain a reasonable sales price to assist you in maintaining financial independence during your retirement years. Before you make any business decisions contact Sy Schnur CPA's, CVA & Consultants Associated.
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