Business Planning - Key Questions:

• How have you arranged for your family business to stay in the family?
• When did you put your business succession plan on paper? When did you last review it and update it for structure and valuation purposes?
• Is your succession plan funded for both death and disability?
• What is your exit strategy for "monetizing" your business?
• How protected is your business in the event you become seriously ill, severely injured, or die?
• How much is your business worth? Have you insured the business at that value?

 

Financial planning for owners of closely held businesses involve:

• Protecting the business owner (and owner's family) from owner's (and key employees') disability or death
• Retention of key employees
• Use of retirement plans (for tax advantaged savings and diversification)
• Lifetime ownership and management transitioning (monetizing the business interest for the owner's retirement)

 

Choices of the proper business entity for the business owner involve issues such as:

• Limited liability
• Fringe benefits
• Flexibility to expand (including going public)
• State and federal tax planning (including AMT, capital gains and taxation at sale or liquidation)
• Continuity of life
• Centralized management and the ability to freely transfer ownership interests

 

The above list is not inclusive but includes many of the major reasons for business entity selection.

 

Cross-Purchase Agreement

 

Redemption Agreement

 

Hybrid Agreements - Wait and See Buy/Sell

 

Key Employee Death Protection

 

Key Employee Retention

 

Retirement Plans

 

Lifetime Exit Strategies for the Closely Held Business Owner