Solopreneurs: Your Business will Die With You

To borrow a line from Dr. Seuss’ “Oh the Places You’ll Go”: “I’m sorry to say so, but sadly it’s true”, if you’re a solo business owner in North Carolina, the chances are that you have no business succession plan in place and should something happen to you – whether it be death or incapacity – your business will crumble. You are your business. Without a succession plan, that’s the ugly truth. If you’re not there, the business dies.

North Carolina does not provide for an easy way to transition a business interest in the event of the death of a business owner (LLC membership interests or S-Corp shares). The interest is considered personal property and will pass through your estate in the probate process (or through intestacy). The probate process can take several months or longer and while the probate process is pending, your business is crumbling.

Want your spouse or children or friend to take over? Do you have a key employee who needs authority to run things while you’re gone? Plan ahead.

Business Succession Planning in North Carolina

Business owners, whether partners or solos, can plan ahead for death and disability with 1) limited powers of attorney; 2) buy-sell agreements; and 3) operating, shareholder, or partnership agreements (depending on the entity) . These agreement allow you to pass on the business interest to someone who can continue to run the business, or allow a key employee to write checks, execute contracts, etc. to maintain business continuity.

They’re easy to put in place but, with all estate and business succession planning, people just need to take the first step, which is calling an experienced attorney to help you.

Don’t want to take that step? You’re rolling the dice with your future and your family’s future. Good luck.