In the case of the unexpected death or disability of a key player, what will happen to your company?
In business, unexpected events can dramatically change the fortunes of a company. A wise business owner looks ahead and develops contingency plans to minimise the risks associated with unforeseen occurrences. Succession planning is one way to help you and your company prepare for sudden, major change.
Succession planning is a process involving a number of key elements:
- Designing a strategy to allow the owner to exit the business by extracting value in a tax-efficient manner, or to pass on the business to family members in a tax-efficient manner.
- In the case of a planned exit, ensuring the handover to the new owner takes place with minimum disruption to the business.
- In the case of the unexpected death or disability of the business owner, ensuring that suitable structures and plans are in place so the business can cope with the loss of a key executive.
Succession planning should be considered by anyone in business (a self-employed person, a shareholder, or a partner) and the process should start right now, even if a transition, retirement or sale is not a current prospect.
For further information, check out Bank of Ireland's succession planning guide (PDF) for owners and managers of small businesses. The guide contains contributions from accountancy experts and covers topics such as financial planning, leadership, selling a business, tax advice, pension planning and retirement benefits.
Andrew Gelling is Director of Taxation Services, Hilary Haydon & Company
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