Keeping your business in the family may be a goal that you have, and it is a good one. Being able to pass on your business could mean building a legacy and helping your family thrive for many generations to come.
To make it possible to keep your family business in your family, you do need to think about business transition planning. When you want to pass on your business to your children or other relatives, there will be some legal work to do. You need to think carefully about how to pass the business on without negatively affecting your own income, for example, and may also want to consider passing on the business only to those actually capable of running it.
Maintaining harmony when passing on a family business
One thing to consider is how to maintain harmony as you pass on the family business. For instance, if you have three children, how will you divide the business to avoid conflict? Will you divide shares and ownership equally? Will you pass the business on to just one child but give monetary gifts to the others? You should think carefully about issues such as:
- Which family member is able to run the business based on their skills and expertise
- If any of your children or other family members are interested in taking over the family business
- If you will need to consider non-business gifts for family members who don’t take over part of the business
On top of this, you will need to create a plan to transition the business from your ownership to someone else’s. A good succession plan will go over important details such as when the business will officially be passed to others and what needs to happen in the meantime. It may take several weeks or months to get a succession plan in place and to implement it because you will need to get a business valuation and work with other professionals to guarantee that the business will pass over to the new owner smoothly.
A succession plan is a must as you go through this process. Know your legal options, so your business can pass on to the next owner smoothly.