How can I empower the process of Business Succession?
Article Licenses: CA, DL, unknown, unknown, unknown
Advisor Licenses:
Compliant content provided by Adviceon® Media for educational purposes only.
Here is how you can empower the process of Business Succession
- Establish appropriate forums Family retreats and regular meetings can allow the family to discuss the issues that will promote the continuation of a profitable company.
- Develop teams and design tasks Select the most promising successor candidates to test their mettle. Include all the constituent players: the owner(s) and spouse(s); the owner’s children (including nieces or nephews) who are involved in the business or are shareholders; key executives; and once the successor is chosen, the following professionals:
- Corporate tax accountant To value the business and assess capital gains tax liability; and to recognize if an estate freeze makes sense. Have the company financials been explained to the successor?
- Corporate lawyer To install buy-sell and share redemption agreements, to advise all parties of various legal risks, and assess all historic agreements to see if they need to be changed in light of the succession.
- Succession consultant These specialists can consult and quarterback the sessions through the entire planning process, keeping it on track.
- Insurance specialist There are various insurance solutions to mitigate succession planning risk.
| There can be no real communication without a reciprocity of ideas.— Ernest Holmes |
Select the right successor
- Look for leadership skills The selection of the right successor is vital to the continuation of a successful company. The most suitable candidate will probably have leadership potential made obvious by willing and capable followers; care for employees; decisive self-confidence; ability to plan strategy and deliver on promises; amiable interaction with peers and colleagues; integrity; ability to inspire others with a vision; skilled at listening to others and can resolve conflicts; and holds others accountable, encouraging them to meet the company’s objectives.
| Man does not simply exist, but always decides what his existence will be, what he will become in the next moment. — Viktor Frankl |
Ask yourself “Whose destiny is it?”
- Understand limiting paradigms Some parents believe that the business was developed for a certain child. But perhaps this child has his/her own alternative career-dream. If a son or daughter is bribed or cajoled into becoming a successor, hard feelings may arise later when the realization of lost opportunity to be an artist, a doctor, or a zoologist sets in.
From the beginning, try to find a contingent successor, as no one knows what the future may hold—change is part of life.
Publisher's Copyright & Legal Use Disclaimer
All articles are a legal copyright of Adviceon®Media and are for educational
purposes only. The particulars contained herein were obtained from sources
which we believe are reliable, but are not guaranteed by us and may be
incomplete. This website is not deemed to be used as a solicitation in a
jurisdiction where this representative is not registered. This content is not
intended to provide specific personalized advice, including, without
limitation, investment, insurance, financial, legal, accounting or tax
advice; and any reference to facts and data provided are from various sources
believed to be reliable, but we cannot guarantee they are complete or
accurate; and it is intended primarily for Canadian residents only, and the
information contained herein is subject to change without notice.
References in this website to third party goods or services should not be
regarded as an endorsement, offer or solicitation of these or any goods or
services. Always consult an appropriate professional regarding your particular
circumstances before making any financial decision. The information provided
is general in nature and should not be relied upon as a substitute for advice
in any specific situation. The publisher does not guarantee the accuracy and
will not be held liable in any way for any error, or omission, or any
financial decision.
Life Insurance and Segregated Funds Disclaimer
Life Insurance policies vary according to contract terms. Please read any
Life Insurance policy contract provided, or the segregated fund summary
information folder prospectus before the time of purchase. Full details of
coverage, including limitations and exclusions that apply, are set out in
the policy of insurance. Commissions, trailing commissions, management fees
and expenses may be associated with segregated fund investments which may
not be guaranteed and their market value changes daily and past performance
is not indicative of future results. A description of the key features of a
life insurance policy, a segregated fund; and any applicable individual
variable annuity contract is contained in information provided by the
company from which it is purchased. Talk to your advisor before making any
financial decision. For specific situations, advice should be obtained from
the appropriate legal, accounting, tax or other professional advisors. The
information provided is accurate to the best of our knowledge as of the date
of publication and is general in nature, intended for educational purposes
only, and should not be relied upon as a substitute for advice in any
specific situation. For specific situations, advice should be obtained from
the appropriate legal, accounting, tax or other professional advisors.
Rules and their interpretation may change, affecting the accuracy of the
information.
