Succession Planning

• Published date: 13 April 2023
• Subject Matter: Family and Matrimonial, Wills/ Intestacy/ Estate Planning
• Law Firm: Hillier Hopkins
• Author: Mr James Johnson

Time to pass on the baton - a business succession plan will help

Business owners looking to pass on a business to a new generation, a business partner, exit by way of a sale, or a sale to employees need to think in advance. A succession plan is a good place to start.

Any business founder will say that running a business is all-consuming - it is more than just a job. It is little or no surprise then that thinking about retirement is not top of the list. It is, however, never too early to start thinking about succession if a business is to continue to grow and flourish once you decide to step down.

A succession plan will vary depending on the type of exit you are planning from your business. For example, passing to a family member will require a different approach to a trade sale. They all, however, will take time and have different tax implications.

The first decision to take is the type of exit you wish to make. In a family-owned business that may well be straightforward, particularly if family members are involved in the day-to-day running of the business. For others, perhaps less so

It is often helpful to ask your accountant to explore those options with you, to act as a sounding board, and to discuss options with family members or co-directors. Their independence will bring a detailed perspective on any skills gap in the business when you leave and where they might be filled.

If a business sale is the right approach, you will need to appoint a solicitor to advise you, paying attention to whether you will be required to remain with the business for any...