What is a business succession plan?

A business succession plan is a legal and financial plan that provides guidance on how a business will be passed on from one owner to another. It may involve passing the business to a family member, an employee, or a new owner. In Missouri, a business succession plan is sometimes part of a larger estate plan that is created to provide financial security for surviving family members. The succession plan may address any or all of the following: transfer of ownership, management, control, and governance; ownership structure; operational and legal issues; financial considerations, such as taxes, loans, and investments; and succession or retirement timelines. The plan must also consider any legal matters that may arise, such as the sale or transfer of business assets. The plan should be tailored to the unique needs and goals of the business owners and, if applicable, those of the new owner. A good business succession plan should provide a blueprint for the future of the business, giving the new owner a roadmap for how to ensure the company operates smoothly and continues to grow. It should also detail the financial, legal, and personal implications for the current owners, as well as the future of the business.

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