Unfortunately, far too few business owners engage in business succession planning. Some business owners may believe loved ones, partners, or employees know their wishes, so they don’t need to formalize them. Others may have every intention of engaging in business succession planning but never get around to it. Still, others may use a DIY internet form to prepare a business succession plan without knowing that the slightest mistake can void the entire document.
You may have spent years of hard work and dedication building your business. Although you may have clear ideas on how you want the business to continue—or not continue—following your death or incapacitation, if you haven’t taken steps to have a formal business succession plan put into place, your wishes may not be implemented. If you were to become incapacitated, you might see the business you’ve put your heart and soul into splinter, with vital assets being lost and unqualified heirs receiving ownership of the business.
A San Jose succession planning attorney from Steburg Law Firm can discuss your wishes for a business succession plan, helping you put a plan into place to determine how your company will function following your incapacitation, retirement, or death. The day will inevitably come when you are no longer leading your business; business succession planning prepares your company for that day in the best way possible.
The long-term success of your business depends heavily on minimizing disruptions and uncertainty during a transition period. However, when there is no clear business succession plan in place, your departure can result in significant risk, not to mention decreased morale of the company’s employees. Attorneys Anita Steburg and Anam Hasan will create a well-crafted business succession plan on your behalf that will secure the legacy of your business for decades to come.
What Could Happen if You Fail to Have a Business Succession Plan in Place?
Without a clear business succession plan, your company’s future could be found in probate court, with your company falling under estate property. If that were to happen, the probate judge would grant control of the business and business assets according to California intestate succession laws. In addition, a family business you intended to pass along to your children and grandchildren could end up being sold off, piece by piece, when there is no business succession plan in place.
If your business is large and complex, your death or incapacitation could lead to boardroom disputes and forced stock sales. In addition, liquidation of assets, intellectual property, and real estate could occur, and who the new owner might be will be anybody’s guess. If you care deeply about how your business will continue when you are no longer at the helm, you must speak to a knowledgeable San Jose succession planning attorney from Steburg Law Firm.
What Is the Primary Purpose of Business Succession Planning?
Having a business succession plan in place can strengthen your organization both now and in the future. Crucial positions can be identified, while any potential vacancies can be considered. You want to ensure your business continues and thrives once you are no longer a part of the business. Identifying skills and competencies necessary to ensure the continuity of your business can be achieved by focusing on individual development within your organization. When you prepare deeply for the succession of your business, you can rest assured that the right people will be in the right jobs, both now and in the future.
What Are the Components of an Effective Business Succession Plan?
While the specifics of your California business succession plan will depend on the structure, size, and type of business, you and your San Jose succession planning attorney will first assess the current status of your business. Based on your wishes while operating within California business succession plan laws, your attorney will create a comprehensive business succession plan.
The business will be valued, successors, identified, and a transfer of ownership and control will be designed. The plan will be implemented at the point you retire, become incapacitated, or upon your death. An experienced San Jose succession planning attorney from Steburg Law Firm will also consider California business tax laws to ensure your plan is implemented correctly. To recap, the necessary components of your San Jose business succession plan will include the following:
- An examination of the current state of your business, along with the direction you expect the business to go in the next 5-10 years. This evaluation helps you balance potential future risks against company resources when building a business succession plan.
- A financial plan will consider your goals, calculating the required financial resources to make those goals a reality. Current financial assets, projected future cash flow from your business, and the projected impact of investments, inflation, and taxes will all be carefully considered when preparing a business succession plan.
- The transition of ownership will address business ownership in the next generation. One specific challenge may include deciding who will hold voting control of the interests of the business. Once succession leadership has been determined, a transition plan must become a part of the business succession plan. An onboarding process detailed in the business succession plan can help transition business responsibilities.
- Choosing whether the business will be governed through a board of directors, the advisory board or a family council will govern a family business is essential to the process.
How to Choose the Best San Jose Succession Planning Attorney
The effectiveness of your succession plan largely hinges on the attorney you choose to work with through the process. Succession planning is a long-term, continuous process, meaning you will likely be working with your Cary succession planning attorney for a prolonged period of time. As such, it is imperative that your hired legal counsel fully understands your business’s culture and identity as well as your long-term financial goals.
When vetting potential attorneys, ensure that you can establish a sense of trust and comfortability with them. You will be discussing your business’s finances as well as your personal goals, sharing key information with them along the way. For this reason, it is important that you enjoy working with them and have confidence in their ability to uphold your interests and help your business achieve your long-term goals.
Your San Jose succession planning attorney from Steburg Law Firm can uncover vulnerabilities that could be contained in your business documents in the form of internal or third-party contracts. If the business were to default on such a guarantee, your new business owner could be held personally liable. When a robust San Jose succession planning attorney is working on your behalf, they will know that your estate and business succession plans are inextricably intertwined, making a complete understanding of California intestacy laws essential.
Why Should You Speak to a San Jose Succession Planning Attorney from Steburg Law Firm?
When you choose Steburg Law Firm to prepare all the necessary business succession planning documents, you can be sure everything will be done correctly. We ensure that when you are no longer a part of the business, your wishes will be properly carried out and that you benefit from tax planning considering any new tax laws. Steburg Law Firm is a woman-owned, family-focused firm with attorneys Anita Steburg and Anam Hasan at the helm, working with their legal support team. Our law firm will be your advocate from start to finish.
We understand the importance of your business and how crucial it is that all your hard work continues into the next generation. However, when you’ve spent decades building a business, you certainly don’t want the state of California to decide how or whether that business will continue. Leaving the succession of your business to chance is not an option. Contact Steburg Law Firm today for a comprehensive evaluation of your business succession needs.