Many business owners should probably want to pass their businesses that they worked and built for their lives to the next generation. Successful succession of active businesses are also good for its stake holders such as those who work for the company, business partners and vendors, customers and the society.
Their typical concern may be:
What can I do to save any family conflict if I want to pass it to my elder child after my passing away but how will my other children feel about? Won’t they be unhappy each other?
Maybe, a will can help. But how can I structure it and what should I say in it?
“I would like to pass it to the employee that understands the business very well or I would like to give it to the husband of my daughter who has been working in the company for long time. But because they are not legal heirs, would there be any good timing or recommendable steps to take?”
“I would like to sell it to a third party. How can I find potential buyers?”
“If I give or sell the shares to the successor, how much tax will I or she have to pay?”
“Are there any good structures that reduce the tax?”
Legal structure or arrangement to the successor has to be carefully considered so it will pass meaningful control over the company. If the structure is poorly set, the successor may not have enough power to manage the company or may end up having to pay too much taxes.
A well designed succession requires expertise in legal, tax and other aspects, you may want to use the skills and experiences of those professionals.
In this blog, I would like to mention and explain possible obstacles and issues, points to consider and how to avoid unnecessary problems and provides tips get the best solutions you can think of from the circumstances.