Often overlooked by entrepreneurs when establishing a new business is the business succession plan. Statistics indicate that most privately held businesses lack any form of succession plan. Whether due to a need to focus on the immediate needs of the business or a shortsighted decision not to incur the expense, the failure to include a business succession plan can have disastrous consequences.

It is impossible to predict the events and changes that will affect the business and the business owners.  Nonetheless, appropriate advanced planning will enable the business owners to deal with these eventualities without the acrimony and expense of litigation. Some of the common events or factors that can be addressed in a business succession plan include the death of an owner, a non-performing business partner, and a business partner who retires.

Another familiar scenario is passing on a family owned and operated business to the younger generation.  Disputes and ill-will are all too common in these family situations, but they can be avoided—along with the expenses they incur—by proper advance planning that includes consideration of the strengths and weaknesses of the succeeding family members.

One of the crucial aspects of a succession plan is defining the method that will be used to value the business at the time an ownership stake in the business is to be transferred. It is critical that the method used to establish the value of the business be reasonable for both the selling owner and the remaining owners.

The Law Offices of Esther Hopkins has the experience and know-how to help new and established California businesses create a smooth succession plan.  Every business is unique, and every succession plan must be tailored accordingly.  We’ll invest the time and resources to create a plan that is right for you.

The Law Offices of Esther Hopkins is a California estate planning and business law firm serving the communities of Thousand Oaks, Camarillo, Newbury Park, Oxnard, Simi Valley, Westlake Village, Agoura Hills, Calabasas and Los Angeles.

To set up an appointment or to get answers to your questions right away, call us at 818-597-3500.