Company Succession - Where is Your Company's Future?
How will the transfer of your company be handled if there is a death, divorce, or retirement in the future?
Closely-held companies (family-owned) should insure that they have clearly identified not only where the business is going in terms of revenues and profits, but to whom the reigns will be passed on after the principals are ready to "hang it up". While most self-made business owners most likely know the worth of their company, outside assistance, whether formal or informal, is highly encouraged.
Is the company worth anything at all without the main protagonist? Is the individual the personification of the Company itself, and is this good or bad? Are there assets, tangible (easy to identify, or intangible (not so easy to identify), customer lists, trademarks, patents, methods and processes, or intellectual property?
The worth of the company should be evaluated periodically, with alternative scenarios such as the unavailability of key players.
Beyond valuation, there are numerous other issues to consider. For example, if shares of the company are transferred to other individuals via a Trust or through probate, is the transfer in conflict with partnership agreements, buy-sell agreements, operating agreements, or by-laws? Does the new shareholder have any idea what to do with the company?
Clearly, planning your path is a necessity. Contact The Law Offices of Dominic E. Rainone to address your specific situation.
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