Getting Out - Business Exit Strategy
It is the dream of every business owner to build up their business, to sell it to a large corporation and gain wealth - for some this will happen and therefore getting out is easy. For most of us it does not.
Therefore, we may have to plan for it. Getting out is the one thing that we all work for but very few people actually plan for it. This is generally known as succession planning.
Let us look at a number of things that business owners should consider.
Partnerships and Limited companies do normally have provision for this within the Partnership Agreement or within the Articles of Association (please visit Business Adviser for more on business constitution).
If you are unsure you need to check your agreement right now to ensure that provision has been made should a partner or shareholder die or wish to retire.
If you or one of your co. business owners dies or retires then you need to make sure that you have the opportunity to purchase the interest and not have somebody else gain control of your business.
On death you need to think about protecting the family of the business owner to ensure that their income is maintained as well as the remaining owners of the business to ensure that control is maintained.
You can do this by effecting Life Assurance protection and having a succession agreement in place such as a cross option agreement. For more on this visit the Business Centre Life Cover Adviser.com or take a look at Business Wills in Wills Adviser.com.
Likewise planning to buy your co owner out or them buying you out in preparation for retirement needs some planning - there are various investment vehicles that can be used to prepare for this INCLUDING YOUR PENSION.
For others types of savings plans please visit Savings Adviser.com.
Business Property Relief may also be available for certain transfers of business assets on death (and gifts in your lifetime which may reduce your inheritance tax liability. Visit Inheritance Adviser.com now.
These are both complex areas of succession planning we suggest that you seek help from us.
Business Entrepreneurs Capital Gains Relief - a relief on capital gains tax when selling your business as a concession because Business Taper Relief eased in April 2008.
Contact us for help or visit the Tax Tables or Capital Gains Tax pages to learn more.
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