Business Planning

KENTUCKY ESTATE PLANNING ATTORNEYS
You used your life savings to build your own business and you want to ensure that your business thrives in the future. You may want to plan for your business to continue on for generations to come, either because you simply want to transfer your business to someone else now, or because you want to plan for the time after your passing. In order to protect what you have worked so hard for, you need to formulate a plan that ensures your business will be protected and in good hands as it succeeds into the future, whether it be to family members, or to another company.

WHAT TO THINK ABOUT FIRST – WHERE IS YOUR BUSINESS GOING?
The first thing you should think about is who or what entity you want to transfer your business to. Do your children want to carry on the family business? Do investors want to buy out your company? Before you can plan for business succession, you must think long and hard about the ultimate goal of where you want your business to be. You should think about what consequences (good and bad) may result from each potential option. You need to ensure that the person or company taking on your business shares the same drive and goals as you. You want the new owner(s) to care as much as you do, so the decision on where your business is going is the most important part of business succession planning.

HOW MUCH IS YOUR BUSINESS WORTH?
Before you decide to transfer your business, whether it is to family members, or to another business entity, you need to know how much your business is worth. You need to know how much equity and debt your business currently has. Knowing what you are dealing with in terms of worth is essential to the successful transfer of your business. You will need to be upfront with the potential new owner(s) of the business. This can be very tricky and the involvement of an attorney who knows how to evaluate the worth of your business will enable you to know that you are doing everything you need to do when transferring your business.

Evaluation of the business also involves a look into how much you will have for retirement funds. An experienced business succession planning law firm will assist you in making the best choices possible to protect yourself and your family following the transfer or sale of your business. Such a determination rests on the proper valuation of your business. If a business is not valuated properly, this can have serious negative consequences on a smooth and accurate transfer of your business.

TRANSFERRING THE EQUITY OF YOUR BUSINESS
Once you have determined who to transfer your business to, whether it be to other people, such as family members, or to another business entity, you must think about how and in what form you want the assets of the business transferred. For example, if you want your business to succeed to your children upon your passing, you will need to determine how the shares of the business will be distributed among the children. Further, you will have to determine if the shares are subsequently transferable or not. Such decisions can be highly complicated and require the assistant of experienced estate and business planning attorneys.

BUSINESS SUCCESSION PLANNING DOCUMENTS
After you have determined how you want your business to be transferred, and who (or what entity) you want your business to be transferred to, there are a variety of documents that must be filled out in order to put your plan in place. Below is a list of factors to consider that may require documentation, and you may need to have your attorney draft necessary documents. This list certainly is not exhaustive, but provides you with the most common issues involved in determining what planning documents may need to be drafted.

The ability to minimize both income and estate taxes upon transfer of your business;
Reorganization and distribution of your business’s equity;
Potential debt your business may owe to creditors that may carry on to the subsequent owner(s) of your business as you transfer it;
If you had employment or other agreements with your staff, you may need to determine how such agreements will be altered or amended once you transfer your business;
Determine if family members have a stake in the business (for example, if there are wills that indicate heirs are to receive a percentage of ownership of the business, or perhaps trust accounts that are tied to your business whereby beneficiaries may have a stake in the business);
Any possible stipulations or conditions you may have about where your business is heading, such as location requirements, or the ability for the business to expand (for example, do you want the business to stay in its current location(s)? Do you want the business to have the potential of becoming a public corporation where anyone can buy stock?); and
Determine how the initial planning documents need to be amended, such as the operating agreement, articles of incorporation, or partnership agreement, depending on what type of business you have (corporation, partnership, or limited liability company, etc.).

CONTACT GOEING GOEING & MCQUINN TODAY FOR A FREE CONSULTATION
If you have a business that you would like to survive for future generations, call our seasoned business succession planning attorneys today to discuss your potential options. Our attorneys will provide you with many different tools to determine what path is best for your goals. No matter how small or large your business may be, our attorneys will craft a plan that gives you peace of mind. While you may be able to find boilerplate forms that will suffice under Kentucky law when transferring your business, it is advisable that you allow a highly experienced attorney to assist you in ensuring you are protecting yourself and your family members. Contact Goeing Goeing & McQuinn today for a free consultation, by calling (859) 904-2045.