In simple terms, Succession Planning is establishing who will inherit or purchase an owner’s equity in the business when that owner exits the business.

This ‘exit’ may be intentional (retirement from the business), unintentional (death or permanent disablement), or forced (default, divorce etc.).

To ensure that your succession plans are actually carried out it is vital that the owners obtain a ‘Business Will’, otherwise known as a ‘Buy/Sell Agreement’. The Buy/Sell agreement determines who will inherit the shares or equity of a business when an owner departs.

This forms an important part of the overall ‘business plan’ and, along with the funding arrangements, is vital for a business where there are two or more families involved, as they ensure that:

  • the control of the business remains with those who the proprietors choose;
  • assets of the business do not have to be sold to pay out a proprietor’s estate;
  • the remaining proprietors and the deceased’s family are all treated fairly;
  • debts are cleared where appropriate;
  • families are not left with capital gains tax liabilities;
  • the business remains viable in the eyes of its creditors, suppliers and clients.


Business Insurance Expert

Meet our business Insurance expert

After working with large teams for many years, Craig decided that he ‘no longer wanted to conquer the world’. Said in jest obviously, he now wants to keep things simple, concentrating on helping his clients with their needs & continuing to provide valuable education & assistance to the financial services industry on Estate Planning.

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