Entrepreneurial activity has increased in recent years. If you own / use a business, what measures have you taken to protect your business for you and / or your family? On commercial affairs – Are you ready? Let’s discover important problems for business owners to take into account.
Did you consider what happens if the business owner / key decision-makers are incapable?
In many small businesses today, the authority to make significant decisions is based on a single person, such as the sole owner, the sole shareholder of a company or a member of a LLC. Often, the documents governing often do not deal who would make decisions if that person is unable to do so. If this key person is unable, several important planning tools are available.
Macabre, I understand. Yet, if you or key policy makers needed to be incapable, do the right people have the power to keep the company in executing and making essential decisions during this period? Are possible decision-makers aware of the plans and are they willing to assume a new role to lead the company as well as possible? What about cash? Does this stop, if something happens / the owner? Did you consider the impact of this?
A limited power of attorney could be used to grant a key person the power to make decisions and continue commercial operations. This type of document could be drafted to allow limited scope to allow the last decision maker to act only if there is an incapacity event.
Another option to consider is to establish an advisory committee to act in the event of the disability of the key decision-making capital. If your company has several senior / key employees or several family members, this can be a solution for you. It is possible to structure the decision-making authority for people named to make key decisions by consensus.
It is also possible that a business owner, to execute a specific document for use in the event of a disability that transfers the company to a trust. This requires research prior to local trust companies that have commercial expertise and the ability to continue commercial operations on behalf of an owner.
Emergency planning in the event of the death of a business owner is an important element of formalizing. Take note here that, in many ways, this is similar to the retirement planning of a business owner. As business owners, it is advisable to plan our exit strategy because we are creating the company. It’s so true! “Exit” can happen more means!
The distribution of personal asset assets is a business, commercial assets are another. If the survivors have not been involved in business activities, the value of the company may suffer significantly, if the plans have not been made before the “output” of the owner. The factors to be taken into account vary according to the ownership structure of the company, the succession plans and the written intentions of the owner. Do you want to offer an option for co-owners, executives, other employees or family members to buy the company in case of death? What about creating a property plan of the employee? How do you envisage the involvement of family members if they are currently involved in the company or not? Do you intend that family members receive income from the company if they are not directly involved in the management of the company? What about placing the company in a trust, allowing a business consultative team to pursue daily operations, while the family maintains cash flow from the company while taking into account the operation or From the sale of the company? Has the company owner specified if family members should or do not have interest in the company? Clear plans and the written intentions of the owner of the company reduce the anxiety for all concerned, especially if they are communicated in advance.