If you own a closely-held business, retirement isn’t simply a matter of deciding not to go into the office anymore.
You have to answer critical questions such as:
- What happens to the business when you’re no longer running it?
- Will you have enough money to retire?
Family dynamics could complicate the whole transition because of the relationships and emotions involved. Most people are not comfortable discussing topics such as aging, death and financial affairs, but succession planning should be a priority for any closely-held or family business. More than 7 out of 10 family-owned businesses fail to survive the transition from founder to second generation.
Developing and implementing a well-designed succession plan is essential to the survival of a closely-held business.
“Thompson Greenspon was hired on a competitive bid process to provide professional support services on the filing of our annual IRS from 990 and completion of an independent audited financial report. In both years they have completed this time sensitive and important tasking assignment in a cost-effective, expeditious and transparent manner that reflects very positively on our nonprofit Board, executive staff, and accountancy team.”
– Tony C.
We help you with these key issues:
Are you going to pass the business on to your family or sell it to key employees or a third party? We help you weigh the advantages and disadvantages of each of these options.
Who’s going to run the business when you’re gone? Management and ownership are not one and the same. In passing the business on to your family, you may decide to transfer management of your business to just one of your children but transfer equal shares of business ownership to all your children.
Minimizing the tax bite. The tax burden when transitioning a closely-held business can be significant. The challenge is that a business is not generally a liquid asset, but taxes are typically due when ownership is transferred.
Making it fair. Transferring ownership to other family members often adds a tremendous amount of stress to individual family members. We advocate talking with each of the family members to ensure that they feel they a getting an equitable and fair share in the process.
Once we understand how you feel about the key issues above, we begin constructing your succession plan focusing on these the following five issues:
- Business Valuation
- Business Restructuring
- Tax Consequences
- Retirement Projections
- Tax Projections