Memphis Business Succession Planning Attorney Eases the Transfer Process
Comprehensive legal advice on ways to shift ownership in TN, MS and AR
At Parham Estate Law, I work with Tennessee, Mississippi and Arkansas business owners to create succession plans that set forth clear instructions regarding transitions of ownership or control. My firm strives to eliminate confusion and unnecessary financial complications when stakeholders go through changes. Business succession planning can involve one or more of the following scenarios: transfer of a family business to heirs; sale to a co-owner; shift of ownership to a current employee, and purchase by an outsider. Whether you run a large corporation or a small, family-owned business, I offer solutions to help you hand over the reins over to the next generation of company leadership.
Why you need a business succession plan
There are several important reasons you might choose to develop a business succession plan, such as:
- Preserving customer goodwill
- Avoiding unnecessary taxation
- Reducing the likelihood of business disruption
- Maintaining quality of products and services
- Preserving the identity of the company
- Ensuring retirement income for an owner through royalties or profit-sharing
You might wish to craft a customized transition plan that allows customers, trade partners and investors to get comfortable with the new leadership before any major changes occur. I can include contingencies to be used in case an unexpected event occurs, such as the death or disability of an owner. I know how hard entrepreneurs work to build their businesses, and I work equally hard to protect the gains you’ve made as you look to the future.
How do businesses benefit from a succession plan?
Having a succession plan in place can make it easier for your company to:
- Attract and retain employees
- Secure lines of credit
- Attract and retain investment capital
Businesses falter when there is uncertainty. Employees, investors, creditors and clients who anticipate a rough transition ahead might become tentative about their own involvement with your company. Establishing a sound line of succession gives your business the best chance to remain prosperous.
What should a business succession plan accomplish?
The goal of a business succession plan is to provide a sense of stability for all stakeholders. To accomplish this, your plan should include these essential elements:
- The name of the successor
- Valuation of the business
- Conditions for the transfer
- Plans to address tax consequences
- Timeline for transfer
- Continuity arrangements
These elements are necessary to protect the rights of the parties and to satisfy stakeholders that the transition will be smooth and that the business will continue to meet their expectations.
Proven counselor handles special considerations for family-owned businesses
Family-owned businesses come with expectations for succession and potential emotional entanglements that might complicate ownership transitions. Those most interested in assuming control may not have the skills, experience or work ethic to drive the business forward. For these and many other reasons, it’s important for the business owner to:
- Determine the fair value of the business
- Determine the importance of continued family involvement
- Assess the business aptitude and passion for the business among family members
- Establish goals for the owner’s retirement
- Identify the family member(s) best suited to making the business successful for the benefit of all stakeholders
- Create an ownership and control structure that balances the needs of family members with the requirements of making the new leadership successful
The succession plan can be part of the owner’s will or living trust, and should employ sound estate planning strategies to minimize tax liability.
Can you modify a succession plan in Tennessee?
Once you have drafted a plan, you should try to stick to it. Unfortunately, you cannot control every circumstance, so you might have to make changes. For example, your chosen successor might decide to pursue another opportunity. Modifying a succession plan due to changes in circumstances or priorities is not a problem, and I can accommodate your needs.
Does your estate plan affect your business succession plan in Tennessee?
For closely held family businesses, business succession should be an important part of the owner’s estate plan. It affects retirement and legacy planning. Unfortunately, too many owners of family businesses put off the inevitable, potentially subjecting the family to stress and discord after the owner passes away. I am fully equipped to turn these complex issues into effective solutions so that your arrangements are on firm footing as you plan for retirement.
Contact an experienced Tennessee lawyer for help with business succession planning
It might be difficult to step aside from the business you’ve built or grown. But since that day will come, it's essential to make the transition as smooth as possible, and I can help. Call Parham Estate Law at 901-602-3361 or contact me online to schedule a consultation at my Memphis office. My firm assists clients from Tennessee, Mississippi and Arkansas.