Creating a successful business requires years of hard work and dedication. Whether the company is a sole proprietorship, larger corporation, or LLC with a board of directors, owners must take a direct hand in the day-to-day operations of the business.
Sadly, an unexpected injury or death can result in a loss of control. An owner who is suddenly unable to control their company may see it splinter along shareholder lines, lose control over vital assets, or have ownership pass to unqualified heirs.
One way to avoid these unfortunate results is to discuss a business succession plan with an experienced attorney. Working with a Cary business succession planning lawyer can help you dictate how you want your company to function after retirement, incapacitating injury, or death.
A sudden death or incapacity will have a traumatic effect on a business owner and their family. If one of these unfortunate events occurs and an owner does not have a business succession plan or a Will, the results can be chaotic.
Owners who do not have a succession plan may find that the future of the company lies in Probate Court. If a decedent does not have a Will, or if that Will does not address the future ownership of a business, North Carolina General Statutes § 29-15 states that the company will fall under the category of estate property. This means that control over the business will follow the rules of intestate succession, which could result in the company splintering to go in equal shares to a decedent’s children or other relatives.
In the case of larger business entities, unexpected deaths or incapacities can lead to disputes within boardrooms that result in a forced stock sale, contested mergers or acquisitions, or even dissolution of the business. Clearly, it is essential for any company in Cary to establish a comprehensive business succession plan with a dedicated attorney.
Many people wonder what legal effect a business succession plan will have. It can be helpful to imagine a business succession plan as being similar to a Will. The owner of the company creates the plan with specific instructions concerning the future of the business. Much like a Will, courts grant these plans legal power during the probate process.
Common topics that a business owner may address include:
A business succession plan does not need to take on a specific form. However, as with any other legal document, it is essential to clearly state one’s intent as well as what one does not wish to occur. A local business succession planning attorney could help company owners identify their goals and give those goals a legal effect.
Having a clear and comprehensive business succession plan is vital to a person’s estate plan and their business practice. Without this document, a sudden death or injury could see a family company fall into chaos or even dissolve. A valid plan can provide clear instructions to board members and help family members or other heirs take on desired roles in the company.
In other situations, people may use a business succession plan as a way to retire from their companies. These can take effect on a specified date, even if an owner is still physically or mentally able to run the company. To discuss these options, call a Cary business succession planning lawyer today. An attorney can help to identify your goals and provide for the future of your family and company.