Business Continuation Planning When a business owner dies, surviving owners want... - Total control of the business, without interference from the deceased owner's heirs
- A prompt transfer of the deceased owner's interest, at a fair price to the surviving owner(s)
- The loyalty and support of employees, customers and creditors during and after the transition in ownership
When a business owner dies, the deceased owner's heirs want... - Ongoing financial security after the loss of the deceased owner's salary and benefits
- Prompt settlement of the deceased owner's estate, including proper tax-valuation of the business interest
- Retention of the business interest by family members... or a prompt sale of the interest at an attractive price
Without a formal, written buy-sell agreement among the business owners, unpleasant consequences may result... - Conflicts and possibly even litigation between the deceased owner's heirs and the surviving owner(s)
- Delays in the transition to successor ownership and in settling the deceased owner's estate
- Potential loss of customers, employees, and creditor confidence that can damage the business-and possibly even force its liquidation
A formal, written buy-sell agreement among the owners of a business is the first step in assuring... - An orderly and successful transition in business ownership following an owner's death
- A fair price for the business interest and terms of sale that are reasonable to all parties
- A set value for the business interest for estate tax purposes, which can help to avoid estate settlement delays and IRS challenges
- Confidence in the ongoing vitality of the business in the eyes of customers, creditors and employees
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