The importance of succession planning for your business

When you’re running your own business, it’s easy to focus all your energy on the here and now. But what will happen when it’s time for you to step back? That’s where succession planning comes in.

What is succession planning?

Succession planning is the practice of identifying who will take over your business when you choose to retire, are unable to continue or simply want to move on. It should be a key part of your long-term business plan, particularly if you have a family business with the aim of passing ownership and control to the next generation. Or you may wish to transfer leadership to a business partner or senior employee. Either way, with effective planning you can help preserve your business’s legacy and ensure it is passed down smoothly.

Planning ahead

Handing over your responsibilities doesn’t have to be stressful if you’ve done the necessary preparation. Our team of experts will work with you every step of the way to ensure that you have the relevant systems and processes in place, as well as having identified successors and ensuring that they are locked into the business. We will also help you to understand the timescales involved.

Offering you a joined-up approach

Succession planning not only impacts your business plans, but it also affects your own personal finances and estate planning. Our Corporate, Company & Commercial team collaborates closely with our trusted colleagues in Wills, Trust & Probate to ensure that all your legal needs are met. Together, we can support you with:

Day-to-day business governance, including the drawing up of documentation, policies and contracts, business dispute resolution, business health checks and more
A robust legal framework for succession, including Family Charters, tailored articles and other planning options
Trusts and IHT advice to ensure your business can be passed down the generations in the most tax-efficient manner possible
Private wealth advice, including Inheritance Tax, Wills and estate planning guidance, to support the safe and tax-efficient transfer of your wealth to the next generation.

Considering the pros and cons

As with any business exit options, succession planning has its advantages and drawbacks. If your successors are familiar with the business, this can often mean there is less risk of disruption. Plus, you may be able to mentor your successor and gradually transfer responsibilities to the next generation whilst you are still in situ.

However, family dynamics can complicate succession planning, so it’s essential to ensure that the next generation is both willing and able to take over. Careful tax planning is also required to mitigate Inheritance and Capital Gains Taxes.

It’s vital that you are fully informed on your options so you can make the best decision for you and your business. We can advise on alternatives to succession, such as third-party sales or management buyouts (MBOs). You can read more about these here.

Here to help

At Attwaters Solicitors, we understand that no two businesses are the same. Our knowledgeable lawyers will take the time to understand your unique requirements and objectives for the future.

To find out how we can help, please do not hesitate to contact our experts in Corporate, Company & Commercial and Wills, Trusts & Probate.

Mark Stigwood, Partner, Corporate, Company & Commercial:

mark.stigwood@attwaters.co.uk and 0203 871 0022

Lesley-Ann Mayhew, Partner, Wills, Trusts & Probate:

lesley-ann.mayhew@attwaters.co.uk and 0203 871 0127

Tony Brownlie, Partner, Wills, Trusts & Probate:

tony.brownlie@attwaters.co.uk and 0203 871 0087

Andrew Flannagan, Senior Partner, Wills, Trusts & Probate:

andrew.flannagan@attwaters.co.uk and 0203 871 0058