Business Succession Planning
Oklahoma City Business Succession Planning Attorneys
Helping You Plan for the Future of Your Business
Business succession planning is a critical part of any business owner's estate plan. It is the process of determining how your business will continue to operate and who will take over when you retire, become disabled, or pass away. Without a proper plan in place, your business may be forced to close or be sold, which can have significant financial and emotional consequences for your family and employees.
At The Schroeder Group, P.C., our Oklahoma City business succession planning lawyers can help you develop a comprehensive plan that protects your interests and the interests of your business. We have extensive experience working with business owners and their families, and we understand the unique challenges and concerns you face. Whether you own a small family business or a large corporation, we can help you create a plan that meets your needs and achieves your goals.
Why Do I Need a Business Succession Plan?
Business succession planning is a crucial component of your comprehensive estate plan. It empowers you to designate a successor and outline the management of your business for when you are unable to continue. Failing to have a solid plan in place may lead to the unfortunate closure or sale of your business, resulting in significant financial and emotional repercussions for your family and employees.
Without a proper succession plan, various disputes can arise, exacerbating an already challenging situation. These disputes may include disagreements regarding ownership transfer, leadership succession, decision-making authority, and the division of assets. The absence of a clear plan may also give rise to conflicts among family members, key stakeholders, or potential buyers, potentially leading to legal battles and compromising the future of the business.
By proactively addressing these potential disputes through a well-executed succession plan, you can ensure a smoother transition, preserve the continuity of your business, and safeguard the interests of your loved ones and employees.
What Is the Difference Between a Business Succession Plan and a Business Exit Plan?
While the terms are often used interchangeably, a business succession plan and a business exit plan are not the same thing. A business succession plan is a plan for how your business will continue to operate and who will take over when you retire, become disabled, or pass away. A business exit plan, on the other hand, is a plan for how you will exit your business and what will happen to it when you are ready to retire or move on to something else.
Both plans are important and should be part of your overall business plan. A business succession plan is focused on the future of your business and how it will be managed when you are no longer able to do so. A business exit plan is focused on your exit strategy and how you will transition out of your business when you are ready to do so.
What Should Be Included in a Business Succession Plan?
A business succession plan is a comprehensive plan that outlines how your business will continue to operate and who will take over when you retire, become disabled, or pass away. It should include a variety of legal documents and strategies that protect your interests and the interests of your business. However, what documents will be necessary will depend on the type of business you own and its needs moving forward.
Some of the key components of a business succession plan sometimes include:
- Powers of attorney
- Health care directives
- Living wills
- HIPAA authorizations
- Buy-sell agreements
- Operating agreements
- Shareholder agreements
- Partnership agreements
- Employment agreements
- Non-compete agreements
- Non-disclosure agreements
- Non-solicitation agreements
- Business continuation agreements
- Key person insurance
- Life insurance
- Disability insurance
- Long-term care insurance
- Business succession agreements
- Business succession plans
Remember, these are just a few of the many legal documents and strategies that can be used to create a comprehensive business succession plan. The specific documents and strategies that are right for you will depend on a variety of factors, including the size and nature of your business, your goals, and your unique circumstances.
What Are the Different Types of Business Succession Plans?
Choosing the right business succession plan depends on the size and nature of your business, your unique circumstances, and your goals. Some of the most common types of business succession plans include:
- Family business succession plans: A family business succession plan is a plan for how your family business will continue to operate and who will take over after your exit. It is designed to protect your family and ensure that your business continues to operate smoothly. A family business succession plan can be as simple as naming a family member as your successor or as complex as creating a family limited partnership or family limited liability company.
- Management buyout plans: A management buyout plan is a plan for how your business will be sold to your management team when you retire, become disabled, or pass away. A well-designed plan is crucial to safeguard your business and ensure its seamless operation. A management buyout strategy can range from a straightforward buy-sell agreement to a more intricate management buyout trust, depending on your specific needs and circumstances.
- Employee stock ownership plans: An employee stock ownership plan is a plan for how your employees will take over your business when you retire, become disabled, or pass away. The purpose of an employee stock ownership plan is to safeguard your employees' interests and ensure that your business operates smoothly. The plan can be kept simple by creating a stock option plan or made more elaborate by establishing an employee stock ownership trust.
- Third-party sale plans: A third-party sale plan is a plan for how your business will be sold to a third party at the end of your tenure. It helps protect your business and ensure that it continues to operate smoothly. There are various ways to structure a third-party sale plan, ranging from a straightforward buy-sell agreement to a more intricate arrangement like a third-party sale trust.
These are just a few of the many types of business succession plans that are available. The specific plan that is right for you will depend on a variety of factors, including the size and nature of your business, your goals, and your unique circumstances.
How Our Business Succession Planning Attorneys Can Help
At The Schroeder Group, our team of experienced business succession attorneys can help you determine which type of plan is best suited for your business and guide you through the process of creating a solid plan that meets your specific needs. Our services include:
- Reviewing Your Current Business Structure: Our attorneys will review your current business structure, including ownership and management roles, to understand how your business is currently organized and operated.
- Evaluating Your Goals: We will work with you to identify your goals for the future of your business, whether it be passing it down to family members or selling it to a third party.
- Identifying Potential Risks: We will conduct a thorough risk assessment to identify any potential obstacles or challenges that may arise in achieving your goals.
- Developing a Succession Plan: Based on our evaluation and understanding of your business, we will work with you to develop a succession plan that outlines how ownership and management will be transitioned in the event of retirement, disability, or death.
- Drafting Legal Documents: Our team of experienced attorneys will draft all necessary legal documents for your succession plan, including buy-sell agreements, shareholder or partnership agreements, and any other relevant contracts.
- Implementation and Monitoring: We will not only help you create a strong succession plan but also assist in the implementation process by providing ongoing guidance and monitoring to ensure its effectiveness.
Our goal is to provide personalized and comprehensive services that cater to the unique needs of your business. With our expertise and experience, you can have peace of mind knowing that your business will be well taken care of in the event of your departure.