This usually involves a buy-sell agreement, secured with a life insurance policy or loan.
There are 5 common ways to transfer ownership of your business: This guide covers each of these succession plan types in greater detail.
If you choose to draft a buy-sell agreement with your co-owner, you’ll want to make sure a life insurance policy is stipulated in the agreement.
Making business decisions within a family can get messy.
Emotions can get unhinged, especially after an untimely death or disability.
Succession plans are commonly associated with retirement, although they also serve an important function earlier in the business lifespan: If anything unexpected happens to you or a co-owner, a succession plan can help reduce headaches, drama and monetary loss as your business grapples with a transition.
A succession plans makes it clear who will take over the business, reducing any potential disputes between parties.
There are exceptions, like a division where one successor can focus on sales, and the other on product development.