Preparations as a Business Owner in Virginia
Preparations as a business owner imperative. One of the common problems in a business is the continuation of running the business after the death of a business owner. Without proper planning, business accounts are frozen or payroll cannot be met because the assets or the value of the business have been halted until someone is appointed to serve as a personal representative or as the director of the company. It is important to contact a professional business planning lawyer to ensure the continued success of the business and to avoid such problems.
Ensuring Future of Business
A business owner can work to ensure that at their death, other individuals are familiar with the client contracts and understand how to perform under the client contracts. This can be very challenging where contracts are based on the relationship of a sole business owner or one of the business owners. It is often important to work with a business owner long before death or retirement to ensure that someone else is groomed and introduced to those accounts so that those accounts are comfortable with continuing on after the exit of the business owner.
In addition, a business owner can work on their estate plan and succession planning to protect investors in the event that something happens to them. A carefully crafted estate plan coordinated with a well-thought-out business succession plan can protect the value of the business both for the business owner’s family and any other investors.
Stating Future Intent
There are a couple of ways to state future intent. Business owners often use insurance policies in two ways. They may have life insurance policies that are payable to other owners or to the business in the event of their death to ensure that there is liquidity and also to provide a cushion so that the business can continue to run. Business owners also consider purchasing life insurance in their personal estate plan to ensure that there is liquidity for their family, while the business is being managed, to pay any debts or taxes so that the business is not required to be sold.
Ensuring that property-related matters will be taken care of is part of a succession planning. Business owners often work to identify different partners or new partners and groom managers so that the business can continue toward this after the business owner’s death. These preparations as a business owner in advance can ensure that a business runs smoothly even after death.
Preparing for Liabilities
To prepare for liabilities, business owners will use insurance planning to pay for any debts or any expenses after their death.
Paying for debts
Business succession planning, or even asset planning, can work to assist a business owner in preparing and paying for debt. Sometimes that is the use of insurance policies at the death of the individual to pay for debt. It is also as simple as making sure that other people in the business have access to the business account so that they can actually use the funds of a business to write a check to pay debts or expenses.
Ensuring Income for Employees
A business owner can ensure that there is a plan in place in the event of their death or incapacity. That plan may include insurance planning. It may include a succession planning, ensuring that there is someone else that has been trained or at least is aware of the assets of the business and the expenses of the business so that the business could continue to operate. Preparations as a business owner will go a long way in management.
Steps to Maintain Value of Business in Future
It is important to make sure there is a succession plan in place so that the business can be maintained for future generations. Often, a business owner may have relationships that assist the business in maintaining its value. Sometimes at the death of a business owner, a business can face a significant reduction in value because contracts or relationships belonged exclusively to the business owner.
A business owner may begin to groom a successor and to introduce them to contacts so that in the event the owner passes away or becomes incapacitated, there is someone who can maintain those relationships. Another thing is to ensure that there is no halt in the business at the sudden death of a business owner. That may mean that business agreements or by-laws may need to be adjusted to provide for the business to physically be able to continue operation after the death of a business owner.