Are you a shareholder, owner or director of a business? Then this article will be highly beneficial to read.<\/p>\n
Understandably most business owners primary focus is on the operational activities, expansion, and growth of their businesses. Due to time constraints and in many instances, owners being oblivious to the consequences they tend to neglect doing proper succession planning within in their own business.<\/p>\n
Business Owners must consider the following:<\/p>\n
Do you currently have an updated Buy and Sell agreement?<\/strong><\/p>\n This is an agreement between shareholders that stipulates in detail what the process is if one of the owners unexpectedly dies or becomes capitally disabled.<\/p>\n Are there sufficient provision to finance the purchase price as agreed in the buy and sell agreement? This is usually in the form of life and disability insurance and is one of the most cost-effective ways to raise substantial amounts of capital. If this is not the case, the whole execution of the buy & sell agreement will be at risk.<\/p>\n When last was your business valuation certificate updated? This is the agreed purchase price.<\/p>\n Have all the tax consequences been considered and appropriately addressed in the planning process, agreements and provisions?<\/p>\n Is a trust one of the shareholders and has the effect of this been correctly treated?<\/p>\n If your answer is no to any of these questions, then you urgently need to attend to this and acquire expert advice.<\/p>\n Buy and sell arrangements that are correctly structured with the correct funding solutions and updated regularly will prevent a whole host of problems and create guaranteed certainty, especially in times of grave uncertainty.<\/p>\n Plan for your business continuity while you are still able to do so. This protects the family of the deceased and guarantees that hard earned value won\u2019t be lost. It protects the remaining partners as business continuity is secured and all negotiations are completed while all the partners are still alive and able to implement it.<\/p>\n