The Law Firm of Lan Quoc Nguyen & Associates
The Law Firm of Lan Quoc Nguyen & Associates

800-505-1238
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800-505-1238
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How to create a business succession plan

On Behalf of | Aug 10, 2021 | Business Transactions And Litigation |

Estate planning is one of the most responsible things that you can do, as it helps ensure that your estate doesn’t get held up in your local probate court, leaving your heirs in a position to be tied up in litigation for months or even years. While many people assume that estate planning only involves homes, life insurance policies, and bank accounts, it’s also important for business owners in California to have a business succession plan as well. There are some things to consider when creating your business succession plan.

Naming potential successors

This step of the business succession plan is especially crucial if you’re the sole owner of a business. Unless you want to dissolve your business after your death, incapacity, or retirement, naming someone to take over the business is a crucial part of your estate planning. If you have business partners, you can have your share of the business distributed among them, or you can leave your ownership stake to another party.

Standard operating procedures

If you make the decision to leave your business to someone who hasn’t been involved in the daily operations, you should make sure to leave a written copy of your standard operating procedures for them. Ultimately, they will make the decisions about how the business operates without you, but providing them with written directions about how to maintain your company’s current success is important. There are several parts of the business succession plan, but this is arguably the most important.

Your businesses valuation

Finally, it’s crucial that you provide official documentation of how much the business is worth and how you came to that figure. If you hired a professional to provide this valuation include the documentation in your plan. Make sure that the person or people who are taking over your business have as much financial information as possible.