Colorado entrepreneurs who are contemplating existing their businesses for retirement have many issues to consider. Business owners who want to move on in a way that will benefit both themselves, their family and the business should have an effective succession plan.
If there is a family member who wants to assume control of the business once the current owner steps aside, the owner will have considered the financial impact of transferring ownership to that family member instead of selling the company outright. The owners should ensure that any transitional agreement to which they agree includes provisions for retirement income for themselves and their spouse.
Business owners who have favorite charities may also want to ensure that those charities continue to receive donations after the business changes hands. A charitable organization can be created through the business so that philanthropy remains a part of the business. Donations can also be made to mitigate the tax assessments on capital gains earned after the business is sold.
Another concern is whether trust funds should be created for future generations. The legal devices can be used to protect the profits earned from the sale of a business. Trusts can also be created and funded with business assets before the change in ownership of the business occurs.
The manner in which family members are likely to handle the wealth should be addressed when creating a succession plan. If there are family members who lack the financial maturity to handle wealth responsibly, there should be safeguards included in the plan to ensure that the money is managed well.
An attorney who practices business and commercial law may assist entrepreneurs with crafting a business succession plan that protects the family business. The attorney may engage in business litigation to protect the rights and interests of clients during business disputes.