Business Succession Planning
The directors of a company are often the major shareholders and make all the key decisions for the firm. A successful business depends on the close cooperation and experience of the directors. The death and/or serious illness of one of the directors can have a serious impact on both the surviving directors and the deceased’s successor(s).
The remaining directors may be faced with a new shareholder and director who has little business expertise and contacts. If the deceased director owned more than 50% of the business, disagreements may arise if the deceased’s successor(s) – who would now be the majority shareholder(s) – has different plans for the future of the business.
Ideally, the remaining shareholders/directors or the company would buy back the deceased’s shares but may not have sufficient funds available to do this. The deceased’s successor(s), on the other hand, may not wish to become involved in the business and might find it difficult to sell their shareholding. They might indeed welcome a cash sum at this difficult time.
Having the correct succession plan in place is a means of solving these problems for both the surviving Directors and the deceased’s successor(s).
Why not talk to one of our lead advisers today to discuss your planning needs?