You’ve spent years building up your business, but have you given any thought to what will happen when you die?
Do you have an exit plan, and if not, how do you go about building one?
First of all you must decide what you want to happen.
Do you want it to be sold? If that’s your goal then how do you make it as healthy and profitable as possible to get the best price when the time comes to sell?
If you have children, do you want them to take over your business, are they able to and do they want to? If you have more than one child, do you want all your children involved; should they own it and someone else manage it?
If you are handing the business on, then you still want it to be in good shape but you also need to think about who will take it over, what training they might need and whether you need to mentor them.
It’s obviously very important to have a Will in place which will detail how you want the business to be passed on and to protect it from inheritance tax. Your business assets may qualify for relief from inheritance tax or there may be things that you can do to reduce the impact of the tax.
For instance, did you know that business relief for inheritance tax reduces the value of a business or its assets for inheritance tax purposes when you die?
The proceeds could one day become taxable for your beneficiaries, so it may well be wise to establish a Business Property Relief Trust which will ensure that the relief is protected.
If you’d rather your family receive money than the responsibility of taking over your company, then have you considered a share purchase agreement? This allows surviving business owners to buy your shares when you die.
To find out more about the different approaches to ensuring your business is protected for your beneficiaries, contact legalmatters. Call us on 01243 216900 or email us at firstname.lastname@example.org to discuss your particular situation.