Man signing business succession plan documents

Business Succession: Put It in Writing While There’s Time

You might have put some of your best years into building your company, but if you do not create a written business succession plan, your company may close down before its time. Just because you have capable people working at the business, that does not mean that they want to or are able to take the reins when you eventually retire or pass on. 

When it comes to business succession, put it in writing while there’s still time. A California business succession attorney can draft the documents you need and provide legal guidance about your options.

Topics to Cover in Your Business Succession Plan

Even if you don’t plan to retire any time soon, life can take unexpected turns. Just as you plan for inflation, downturns in the market, and other business realities, you should have a written plan for what will happen if you are no longer at the helm.

  • If you would like to step away from the day-to-day management but still have a seat on the board of directors, you should name someone to run the company. Make sure to sign the documents that will give that person the legal authority to make decisions for the company. You should also address your health and life insurance issues, as well as the income you will receive and the duration of that income. 
  • When your spouse or other dependents rely on your income, be sure to address those issues in the succession plan, particularly if you die or become incapacitated.
  • If you would prefer to cash out your interest or sell the company entirely, you will want to include those terms in the written plan.
  • You should not assume that a family-owned business should stay within the ownership or control of your relatives. Your close relatives might not be the right candidates to take over after you step aside. It might be better for your family to have other people run the company while your family receives an income stream from the company.

These are merely the starting points for your succession plan.

A Deeper Dive into Your Succession Plan

Depending on the unique facts of your situation, you might want to consider going into detail on topics like these in your business succession plan:

  • Who will control the patents, trademarks, copyrights, use of the company name, your likeness, and the intellectual property of the business?
  • Who will receive the assets of the company if the business shuts down?
  • You might have worn multiple hats during the launch and growth of your company, but it would probably be better to designate different people to assume the multiple roles of running the company, like the chief executive officer (CEO), chief financial officer (CFO), and the heads of sales and marketing.
  • If you have business partners, your succession plan should not conflict with the partnership agreement. 

A California estate planning attorney can help you navigate these issues and help you develop a business succession plan that can meet the goals of your estate plan. Get in touch with our office today for a free consultation.