Family business owners often want to pass their businesses on to their children. That may have been their goal from the day they started, or it may have developed over time. They think of the business not only as a project that they took on, or a career that they forged out for themselves but as something they can give to their children to help shape their future.
In fact, some studies have found that about 75% of family business owners do plan to let the next generation take over ownership when they retire. That’s the goal they have in mind and the one that they’re working toward.
However, roughly 50% of these businesses do not have any sort of succession plan in place at the time. This means that there are many business owners out there who know they want to give their kids the business, but who have not put a plan in place to do so and have no idea how that transfer will actually take place.
A missing succession plan can cause tremendous problems
A lack of planning can lead to numerous problems. Some are technical, in the sense that business owners just don’t know what steps they need to take. Others are more personal, such as cases where children don’t actually want to take over the business but their parents have never asked them what they want. You can also have disputes between multiple siblings who all thought they were going to take over the business, as there was no direction given.
For all of these reasons and more, it’s quite important for business owners to take the time to make a succession plan and to consider all of their legal options. Good, advanced planning can help your business continue for years to come.
Notice: We are providing this as general information only, and it should not be considered legal advice, which depends on the facts of each specific situation. Receipt of this content does not establish an attorney-client relationship.