What is a business succession plan?

A business succession plan is a legal document that outlines how a business will be passed from one generation of owners to the next. This document also contains information about the distribution of assets and liabilities in the event of an owner’s death or retirement. In Colorado, these plans are often created as a part of trusts and estates law. The purpose of a business succession plan is to ensure that the business’s continuity and continued success are secured. The plan identifies the roles and responsibilities of the new owners and any limitations on their authority. It may also contain clauses like a “buy-sell” agreement which provides that if an owner wishes to leave the business, their ownership shares of the company are purchased by the remaining owners. Business succession plans can also provide tax benefits. These plans often take into account the tax ramifications of passing on a business, and ensure that the owner’s heirs receive the maximum benefit from the transfer. In Colorado, a business succession plan should be drafted by an experienced trusts and estates attorney. This attorney will be able to advise on the best plan of action and will ensure that the plan is tailored to the owner’s specific goals. The attorney will also be able to address any necessary changes that may need to be made to the plan over time as the business grows and evolves.

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