Succession Planning in Family-Owned and Non-Public Businesses and Business Divorce Preparation

Implementing a Strategy for Owners to Retire or Pass on Privately-Held Businesses or Retain Ownership

Recording of a 90-minute CLE webinar with Q&A


Conducted on Wednesday, April 15, 2020

Recorded event now available

or call 1-800-926-7926
Program Materials

This CLE webinar will provide business counsel with a roadmap for determining best practices for creating a solid succession plan to keep a business operational and viable. The panel will further explore the thorny issues that arise when a private entity faces a business divorce and its owners can no longer work together.

Description

Most small business owners have no exit plan or strategy for continued operation once they step aside. For family-owned and privately-held business family dynamics, the nature of the business itself and the current ownership structure and manager all significantly affect the future operation and potential transfer.

Business counsel can play a crucial role as owners or senior management make the decisions and craft the operational and legal documents necessary to ensure a steady transition of power. In the best of circumstances, counsel will be able to create a viable exit strategy at startup. Failure to take into consideration at corporate inception could result in reputational damage to the attorney and firm, malpractice threats, or a report to the bar for ethical violations when disputes between the owners ultimately arise.

In the worst-case scenarios, succession planning and retirement of an owner can lead to a crisis. These "business divorces" can have significant legal and financial implications for owners. A well-constructed exit plan included in the organizational transactions and governing documents at startup can help lessen the economic impact when a business divorce occurs. The plan should address asset division, owner compensation, and competition restrictions, among other issues.

Listen as our panel of experts explains how to assist business owners in planning for a successful transfer of ownership and develop an exit strategy for their family business. They will cover the issues when exiting a business triggers the potential divorce of the owners and threatens the continued existence of the enterprise.

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Outline

  1. What is a business succession plan, and why it is important
  2. Components of a business succession plan
  3. Considerations for planning, documenting, and implementing the plan
  4. Potential reasons to consider a business divorce
  5. Advance planning
  6. Legal representation
  7. Initiating an owner exit
  8. Form of owner exit
  9. Purchase price and terms
  10. Ancillary issues

Benefits

The panel will review these and other key questions:

  • When and how should succession planning be incorporated in the organizational documents of the business?
  • What role should the departing owner play, and what remaining obligations does the business owe to the former owner?
  • What is a business divorce?
  • What legal and business issues commonly arise when one or more owner decide to exit a private company?
  • What are the components of a well-constructed exit plan and some best practices for negotiating and drafting such a plan?

Faculty

Basi, Bart
Dr. Bart A. Basi, CPA

Senior Advisor
The Center for Financial, Legal & Tax Planning

Dr. Basi has expertise in the areas of financial accounting, business succession, business valuation, mergers and...  |  Read More

Basi, Roman
Roman A. Basi, CPA

President
The Center for Financial, Legal & Tax Planning

Over the past several years, Mr. Basi has worked on many business transactions and has lectured to various regional and...  |  Read More

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