Philadelphia Business Succession Lawyer
Philadelphia Business Succession Lawyer
Pennsylvania business owners face constant challenges in operating and growing a successful company, and they are well-prepared to handle the routine pitfalls. However, there is one hurdle that can be particularly daunting: Business succession planning. Organizations dedicate less effort to what happens when a key executor or employee dies, and statistics on succession planning reveal the prevalence and consequences. While 86 percent of business leaders consider it urgent or important to have a strategy in place, just 13 percent believe they are effective in developing and implementing one. When surveyed about a recent change, large companies reported that they could have generated around $112 billion more in market value with a business succession plan in place.
Your organization may not be looking at billions in losses without a business succession plan, but note another important statistic about family-owned companies: Second-generation leaders fail at a rate of 60 percent, while the failure rate for second-to-third generation transitions is 90 percent. It is our goal at Scott Counsel, P.C. to prevent this from happening. We are prepared to develop solid strategies for preserving your business through future changes, so please contact our firm to discuss options. A Philadelphia business succession lawyer can provide details, and an overview should help with the basics.
Benefits of Business Succession Planning
Though the advantages impact companies in different ways, the most impactful benefits of having a business succession plan are certainty and stability. However, there are also some specific reasons to consider your options:
- A business succession plan protects your company from unexpected changes, particularly with employee turnover. It is important to invest in the health and loyalty of your team, so there are qualified candidates already within your organization if you need to fill a key position.
- A related benefit in terms of your workforce is applying business succession principles to employee retention. By offering clear opportunities to excel and grow, you keep the best talent under your roof. You can embrace workforce continuity with a long-term team rather than constantly trying to recruit externally.
- Small businesses can suffer when a key executive passes away or becomes disabled. This individual may be the “face” of the company, carrying valuable goodwill with customer relationships. It is difficult to replace someone with specialized knowledge or skills that contribute to the business. Succession planning prevents this gap or minimizes the impact.
- With family-owned companies, succession planning can smooth conflict, institute trust, and enhance communication. These factors often contribute to business failure, and they are most often present among stakeholders who also have personal, familial connections.
Components of a Business Succession Plan
There are multiple strategies for making sure your company can properly leverage these benefits, so business succession issues will impact every organization differently. When building a solid foundation through business succession planning, you might consider one or more of the following options.
Estate Planning: When a person passes away or becomes incapacitated, no one else has the power to act on their behalf. This is a problem at a personal level, but a lack of leadership can have catastrophic implications for a business. With an estate plan that incorporates business succession tactics, you can avoid these challenges. For instance:
- By preparing a power of attorney, you can appoint someone as your agent concerning business matters. If you are incapacitated, this person can act without any need for court involvement. Your power of attorney can include detailed directions on the agent’s authority and duties.
- One primary purpose of a will is to provide instructions on how your assets are to be distributed to beneficiaries. When preparing your will, you can also specify how you want your ownership interests in a business to be handled.
- With a trust, you appoint a trustee to manage your real estate and personal property. If you become incapacitated or pass away, your trustee can take over almost seamlessly.
Contingency Planning: Just as the term indicates, contingency planning is preparing your business to effectively respond to events or circumstances – even if they do not materialize. With a structure in place, you have the answer to “What if?”
Wealth Management: When you own a business, there are financial, tax, and legal matters that pertain to both your personal and professional interests.
Exit Strategy: The general objective of a succession plan will be to continue the business through transfer to a family member or key employee, though you can also lay the foundation for selling to a third party. It will be important to implement strategies to prepare whoever takes over and set them up for success. Plus, even when you are selling, a business succession plan can add value to the purchase price.
Legal Help with Business Succession
It is useful to review the components of a business succession plan, but it takes extensive legal knowledge to implement a strategy and maximize the benefits. At Scott Counsel, P.C., our Philadelphia business succession attorneys start by conducting a meticulous review of the current state of the business. In devising a suitable plan, we will also:
- Assess your goals and intentions for the company;
- Discuss your family situation and whether you will look to these individuals to carry on the business;
- Evaluate and identify key employees to cultivate for succession purposes;
- Work with you on estate planning that incorporates business succession principles;
- Consult with you on tax matters and wealth management concepts;
- Advise you on potential exit strategies that protect your interests, family, and business; and
- Maintain an ongoing relationship to assist with modifications and updates.
Set Up a Consultation with a Philadelphia Business SuccessionLawyer
It is crucial to know the basics and components of business succession planning, but legal help is critical when it comes to developing a strategy. To learn how we can support your future, business, and family, please contact Scott Counsel, P.C. You can call (856) 485-4585 or visit us online to schedule a consultation with a Pennsylvania business succession attorney. After reviewing your unique circumstances, we can guide you in ways to meet your core objectives.
– When my son, who has Cystic Fibrosis and CF related diabetes, was suddenly and unexpectedly removed from his Medicaid program, we were devastated and frightened not knowing where we would get the resources to pay for his extremely high priced prescriptions. Justin was the attorney who handled our case. From the very beginning, he proved to be very thorough and experienced with navigating the process of reversing the Medicaid decision. However, it was his apparent kind, caring nature that made us feel the most at ease. Justin was successful in securing a continuation of benefits for my son, and we are extremely grateful for having his expertise during this most stressful ongoing process. Thank you, Justin!
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