Owning and operating a small business in Maryland can be a satisfying endeavor, but have you ever thought of what will happen to your business if you suddenly became incapacitated or passed away? Business succession planning is an integral part of ensuring that your family-owned business will stand the test of time.
What are some options for business succession? One option is to simply sell your business. When is the best time to sell your business? That depends on the individual. Some may want to sell while they are still active owners and operators of their business. Others may want to sell when they retire. Still others would prefer for the sale to take place at their death. There are a number of things that can be done with the proceeds of the sale. If the original business owner is still alive, that owner can use the proceeds from the sale to pay for living expenses. If there are certain taxes to be paid upon a person's death, the sale proceeds could go to those expenses as well.
Another option for business succession is to enter into a buy-sell agreement. Such an agreement lays out when an individual's business interest can be sold, for how much and to whom. These agreements are legally binding. Such agreements can allow an individual to plan the sale of the business ahead of time, which may help avoid certain issues that could have a negative effect on the business. Knowing that the funds of the sale will be available can also help a person plan financially.
There are other options for business succession as well. Developing a business succession plan is an important part of estate planning for small business owners in Maryland. By planning ahead for the inevitable, Maryland residents can ensure that their needs and wishes will be met, and that their business will continue to grow and thrive.