Succession Planning in Maryland
It is important to develop a succession plan for your business so that it will effectively continue after you or other key leaders chose to retire, become disabled or pass away. Business succession planning in Maryland should be incorporated into your overall estate plan.
If you are interested in having an all-inclusive plan in place that may help make sure that you can financially support yourself through retirement as well as provide an inheritance for your loved ones, contact a skilled planning attorney today. Maryland succession planning attorneys can help you protect the distinctive business you have worked hard to cultivate and grow.
Types of Business Entities in Maryland
Some common types of business entities in Maryland include:
- Sole proprietorships
- Partnerships
- Limited Liability Companies
- Corporations
Deciding Who Will Take Over a Business
Deciding who will run the business in a person’s absence is one of the most important decisions a person could make as a business owner. They want to select a person who is familiar with the business operations and will be able to maintain its success.
Many family business owners would like to keep their business in the family. If they have children or other family members who have worked with the family business and they feel that they may continue to run it responsibly, these may be good candidates to take over operations.
If the family is not involved in the business or they do not have business partners, they may have some lower level employees who have shown an aptitude to take on more managerial roles and a desire to assume responsibility for running the business.
If there is not anyone who they think would be interested or capable of inheriting the business, a sale may be the best option. A sale is also a good option if they need the money from the business to finance a retirement.
Tax Implications
Anytime a person wants to sell or give away a large asset, they should examine the tax implications of that transfer before a decision is made to avoid paying unnecessary taxes. Although they may not always be able to eliminate taxation on a transfer, there are usually some planning techniques available to at least minimize taxes.
Several factors including the valuation of a business and the type of business structure that is set up will determine the tax liability of transferring or selling a business. There may be tax consequences resulting from either a sale or gift of a business.
Although Maryland does not impose a state gift tax, it is possible to incur a federal gift tax liability or a need to file a gift tax return depending on the fair market value of the business. If it is elected to sell the business, it may generate income or capital gains tax exposure.
Speak with a Maryland Succession Planning Attorney Today
It is never too early to prepare yourself for the future. Although retirement may seem like many years away, unforeseen events such as death or disability can happen unexpectedly.
Having a succession plan in place before any major disruptive events occur will help your everyday business activities continue smoothly and avoid large costs associated with implementing an emergency plan last minute.
If you would like to start developing a succession plan for your business or organization in Maryland, please call today to schedule a consultation with skilled Maryland succession planning attorneys.