Transition Planning
New York Transition Planning Attorney
The amount of money you ultimately earn from your business depends in large part on the manner and timing of your transition out of it. So, too, does the chance your business will survive into the next generation. While the vast majority of businesses in the United States are comprised of family-owned entities, most do not survive into the second generation and by the third generation, 85% are extinct. The odds your business will survive your transition out of it, and the amount of money you earn from your business, are much higher if you have a thoughtful plan in place. Unfortunately, most business owners do not have such a plan.
What factors should you consider in transitioning out of your business? While every situation is unique, business owners typically must address several key issues:
Fundamental Objectives
The date of your transition, the income you’ll need for financial security, and the person, people, or entity you want to take over the business should all be identified well in advance.
The Value and Cash Flow of Your Business
How much is your business currently worth and how much income will it generate after you leave.
Enhancing the Value of Your Business
This involves finding ways to make your business worth as much as possible before you transition out of it.
Who Will Take Over Your Business
Do you want to transfer your business to family members? If so, you have to be sure that they are capable of running the business and genuinely want to do so. You must also consider how family members who do not want to participate in the business will be “compensated” for other family members taking ownership of a valuable asset. If you want to sell your business outright to co-owners, employees, or a third party, you’ll want to maximize the return on your initial investment, minimize tax liability, and ensure a comfortable retirement.
Business transitions are stressful times for any business owner and involve complex issues of corporate governance, financing, taxation, asset protection, trusts, and estates. At Crisafulli Gorman, P.C., we can guide you through the entire process, so your future, and the future of your business, is well mapped out. Specifically, we can:
- Assist you in determining the proper business structure to accommodate future changes in ownership and management
- Advise you in deciding on future ownership and management of your business, whether to internal purchasers, third-party purchasers, or family members
- Help you determine the most efficient method to transfer ownership and management of your business, via sale, merger, earn-outs, gift, or bequest
- Counsel you in structuring the transfer of your business to achieve maximum tax benefits
- Draft and negotiate transaction documents, including:
- Stock Purchase Agreements
- Asset Purchase Agreements
- Merger Agreements
- Buy/Sell Agreements
- Shareholder and Operating Agreements
- Non-Compete Covenants
- Consulting Agreements
- Management Agreements
- Transition Services Agreements
- Stay Bonus Arrangements
- Utilize trusts and Last Will and Testaments to:
- Protect business and personal assets from the costs of long-term care
- Assist family members who, because of youth, disability, or poor decision making, are unable to own and manage business interests outright
- Reduce or eliminate capital gains, income, property, federal estate, and New York State estate taxes
- Shield business and personal assets from creditors through Delaware Trusts
- Guard against losing family business interests and personal assets due to divorce
The combined expertise of the attorneys at Crisafulli Gorman, P.C. in business law, estate planning, tax law, trusts, and more makes our firm uniquely positioned to assist you with business succession or exit planning in a comprehensive, highly-effective manner.
Nobody lives forever, but with proper planning your business and your legacy can. Contact us today to discuss your particular needs and goals.