Raymond J. German www.GermanLawGroup.com
If you are a successful business owner then you haveundoubtedly put in thousands of hours and a significantamount of your own money into making the business asuccess. What happens to your business though if something happens to you? Whether your business is asole proprietorship or a partnership, a well though-outbusiness succession plan is necessary to ensure thesurvival of your business. Of course only you and yourestate planning attorney can create your own individualbusiness succession plan; however, a basicunderstanding of the subject matter is a great place foryou to start if you have yet to complete a plan.
Why Do I Need a Succession Plan?
To understand why you need a business successionplan, consider what would happen without one undereither of these scenarios.1.
You and your partner Joe have a successfulbusiness formed by a formal partnershipagreement. You are both young and the thoughtof either one dying is not something you worryabout; however, Joe is unexpectedly killed in atragic car accident. Joe left behind a Last Will andTestament that gave everything to his young wife
Sally. Legally, Sally now owns Joe’s share in your
business yet Sally knows nothing about thebusiness and has no interest in learning. Sinceyou invested your life savings in the business, you
don’t have the cash to buy out Joe’s interest in
You own a successful sole proprietorship andhave hope that one day your children will takeover the family business. Although you havediscussed the possibility with all three of yourchildren, a legal succession plan has never been
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Whether your business is asole proprietorship or apartnership, a well though-out business successionplan is necessary to ensurethe survival of yourbusiness.
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