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Arlington County Business Succession Lawyer

Business succession involves proactive planning for the transition to new management and controlling ownership after the majority owners or managers retire, become disabled, or die. In Arlington County, business succession planning should remain an integral part of an overall estate plan. Due to the overwhelming majority of business in the United States being run by family-owned enterprises, many are subject to severe tax implications and other consequences during the transfer.

Moreover, such planning may require insightful legal counsel from an Arlington County business succession lawyer to assist in the establishment of a proper business succession plan with the goal of attaining maximum returns for the founders while strategically providing continuance and protection for the enterprise.

The Importance of a Succession Plan

Without a comprehensive succession plan in place, the sustainability and profitability of a business or entity can be seriously impacted. Some common transition issues may include:

  • Introducing new partners or equity holders that have little to no experience in the business;
  • The unexpected departure of a key management individual;
  • The death of an owner and the need to liquidate interests.

Moreover, the owner’s unique objectives and goals for the succession of the business become the pivotal point in the establishment of a plan. It then seeks to establish how any changes in the ownership of the company will be executed. As time passes and new situations are introduced, the succession plan must be reviewed and updated. Business succession is a critical component of all businesses, especially with family-owned enterprises.

A successful plan implements a smooth, seamless transfer of one’s business over to a family member, third party, or business partner. With key reasons such as providing liquidity for the owners as well as the minimization of taxes, whether by gift, will, or trust, a plan can help mitigate any disruptions caused by business operations.

Common Succession Problems in Arlington County

According to PWC’s U.S. Family Business Survey (2017), succession planning has become a perpetual problem for today’s family businesses. Nearly 44% of those surveyed believe that succession planning will become challenging over the next five years, and only a mere 23% have an adequate, documented succession plan in place.

One of the reasons why these numbers are staggeringly low is because family business leaders are hesitant to pass on their businesses to the next generation. Moreover, when owners cease to maintain control, yet do not have a formal succession plan in place, serious problems can occur such as:

  • A lack of liquidity in a business to support the transition of ownership;
  • A lack of support for the successor leadership;
  • Next-generation family members lack the ability to lead and are unprepared.

Rather than waiting until all available options become limited, family businesses should plan for succession to avoid these major problems. The truth is, one major reason why family businesses do not participate in succession planning is because of the complexities involved. For more information, get in touch with an Arlington County business succession lawyer.

Talk to an Arlington County Business Succession Attorney Today

Family business succession planning must take account of innumerable unknown circumstances and current facts that continue to evolve and interact, like the economy and family dynamics. It is understandably difficult for family business owners to comprehend how they can develop a robust, written plan that will allow for a seamless transition.

With the assistance of a skilled Arlington County business succession lawyer, business owners can work together to begin the process and look to develop a formal succession plan that retains a sense of control over their enterprise.

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