Succession Planning: Keeping it in the Family, Without Starting a Feud

Succession Planning: Keeping it in the Family, without Starting a Feud

In my previous post, I emphasized the importance of long-term and comprehensive planning to ensure that a business succession is as trouble-free as possible, and will leave the most after-tax dollars in your pocket. When that succession plan involves passing the business to a child or other family member, a host of considerations come in to play. Many of these have nothing to do with dollars and cents. Interpersonal relationships can quickly complicate, even sink, …

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How do you Pass the Torch without Getting Burned

How do you Pass the Torch without Getting Burned?

A succession plan that leaves the most dollars in your pocket is years in the making. Two years ago, the Canadian Federation of Independent Business found that about 54 per cent of its members planned to exit their businesses within five years, but only nine per cent had any formal written exit plan. Around the same time, KPMG, on behalf of the Canadian Association of Family Enterprise (CAFE), found that only 11 per cent of 322 family businesses surveyed had …

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When Tragedy Struck, these Shareholders were Prepared

When Tragedy Struck, these Shareholders were Prepared

In my last post, I presented a case study about Howard, the owner of a successful manufacturing company. When Howard passed away without a suitable buy-sell clause to ensure an orderly transfer of his ownership interest, all of the business’s stakeholders were caught in the crossfire. These included the other shareholders, his wife and his children. Today, I have another case study that ends on a more positive note. Why? Because these shareholders did it right …

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In the Absence of a Buy/Sell Clause, Everyone gets Caught in the Crossfire

In the Absence of a Buy/Sell Clause, Everyone gets Caught in the CrossFire

In my previous post, I talked about what is arguably the most important, but often most overlooked, component of a shareholder agreement – the buy/sell clause. This mechanism establishes the ground rules for the orderly transfer of an ownership interest. I’ve seen a lot of unfortunate situations in my work—shareholders who pass away, become ill, succumb to substance abuse, endure personal crises that derail their business focus, or simply fail to fulfill their obligations to their …

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