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What if your kids do not want to inherit the family business?

On Behalf of | Jan 12, 2021 | Uncategorized |

You may own a small family business in Geneva that has seen financial success over the years. You are now thinking of retirement, but you may face a roadblock if your adult children have no interest in taking over the family business. To avoid having the enterprise you so carefully tended to over the years fall apart, you will need to have a business succession plan as part of your estate plan. There are several ways you can transfer ownership of your business to someone else.

Sell the business to a partner

If you have a partner who is co-owner of your business, you may sell your share in the business to them via a mutual buy-sell agreement between you and your partner. This has the advantage of ensuring the transition does not come as a surprise to either your business partner and family members. A buy-sell agreement ensures that your family will be appropriately compensated and will allow your partner to continue to have control of the business.

Sell the business to an employee

Perhaps you do not have a business partner or family member who wants to take over the family business. In this situation, you may decide to sell your business to an experienced and respected employee. Key employees already invested in the business may be better able to maintain the quality of your business compared to outside buyers. Such a sale can be accomplished through a buy-sell agreement.

Sell the business to a third party

Sometimes there simply is not any clear successor to take on ownership of your business after you retire or pass away. When this happens, you may choose to sell your business to an outside party. This could be an individual or even a competitor. To ensure your are appropriately compensated, you will need to obtain an up-to-date business valuation.

Make business succession planning part of your estate plan

If you own a small business, you will want to make a business succession plan alongside your estate plan. After all, no one can predict the future. You could become incapacitated or suddenly pass away. If there is no clear path towards succession, it could mean the end of your business. Plus, business succession planning can create a clear path to retirement for small business owners. With the right plan in place, you can ensure your business will remain viable long after you are gone.