Bristol, UK, Successful passing on of a family business depends on careful planning, according to the legal experts on SME website Law Donut.
In a set of FAQs relating to passing your business on to your family, Law Donut’s specialists advise that in most cases it takes a period of at least two years to prepare.
Among the most important areas to consider are:
whether you want to retain any investment in the business
whether you want to realise any capital from the business and whether the business needs to raise additional financing to allow for this
how ownership of the business will be shared between yourself, your spouse, your children and any other owners
how any transfers of shares or assets can be arranged tax-efficiently
who will manage the business, including whether you will have any future role in management
grooming your chosen successor and planning the handover of control
Transferring a business within a family also includes risks. These could include a loss of direction for the business, particularly if the founder was a dominant leader, or the business becoming financially vulnerable if the founder takes too much capital out.
These and other risks can be reduced by planning in advance and taking suitable advice. As with any other major change, Law Donut’s experts advise involving key personnel from the outset can help to reduce problems.
Law Donut is a specialist free resource for UK SMEs. It covers a huge range of legal issues relating to doing business in the UK, including issues relating to funding, buying and selling a business.
The Law Donut is at www.lawdonut.co.uk
Contact:
Anthony Mullinder
BHP Information Solutions
Bristol, UK
0117 904 2224
info@lawdonut.co.uk
http://lawdonutblog.co.uk
