How You Transfer Ownership in Business Succession Planning is Critical to Long-term Plans

A significant generational transfer of wealth and businesses is underway in the United States and will continue over the next decade or so. That’s because more than 50 percent of small businesses are owned by someone over 55 years old. 

And nearly all of them, according to a recent study by U.S. Bank, are planning on retiring by the time they are 65 years old.

For many of those businesses, it will be the end of the road, as only 30 percent of businesses survive to the second generation of ownership.

If a business owner wants their legacy to survive their retirement or death, they must take action early to put together the right plan for the business.

A succession plan can look very different for every business, as every business – and every owner – has unique situations. 

One of the first questions to answer will be how to transfer ownership to the next generation of owners, whether it is family, employees or other partners. The four main ways to do that are to:

• Give the business to someone,
• Sell the business to someone,
• Include the business as an inheritance, or
• Place the business in a trust.

In this article, we’ll look at the advantages and disadvantages of each. 

The attorneys at The Orlando Law Group specialize in helping businesses structure their succession planning in Orlando, Sanford, Winter Garden and Kissimmee and are here to help set up the tools and programs that can keep your company running for generations.

Giving the Business Away

At first glance, someone might wonder why a business owner would simply give the business away to someone. After all, the owner spent a lifetime building the business and should expect something in return.

However, there are plenty of reasons to give away the business, as that is often among the easiest ways to transfer ownership of a business. 

Read More