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Making a success of
succession
After a
lifetime building up a
business, many people
worry about how to retire
successfully while
ensuring that the firm
continues to thrive.
Peter Sutherland, a
partner at Andersons
Solicitors in Nottingham,
explains how to get a fair
deal for everyone when
handing over to the next
generation.
To ensure a
smooth succession it’s
vital to start planning
several years ahead of
your target retirement
date. The first step is to
hold meetings with those
who will run the business
when you leave so you can
agree an exit strategy.
If you own
a large share of the
business, the remaining
partners or directors may
need to raise money to buy
you out. Or if the firm is
very successful, some of
its profits could be used
to raise part of the
necessary finance. This
approach would need Inland
Revenue clearance but is
worth exploring.
It may be
that you agree to sell
your shares back over
several years so the
firm’s finances aren’t put
under too much pressure
all at once. In that case,
you may need to change
your will so the
arrangement can continue
should you die before the
sales are completed. There
could be tax implications
whichever system you
choose for withdrawing
capital from the firm so
professional advice should
be sought.
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