For Businesses
Financial Planning for Business Owners
Business owners face unique challenges—and opportunities—in terms of financial planning. It takes hard work and careful planning to develop ideas into a successful business: continue that tradition by choosing a financial adviser and planning strategy that takes advantage of your unique situation.
If you are considering making a change to self-employment, a comprehensive plan can help with the adjustment from a situation where a previous employer might have provided benefits, such as life insurance or a company pension. Also, a good plan can help put you on a path to creating a successful business, by guiding you through some of the financial challenges you might face and by walking you through some of the tax benefits available.
No matter what stage of growth your business is in, contact us today to design a tax-efficient business planning strategy.
Business Succession Planning
You worked to develop a business, and now it’s time to enjoy the results. Many entrepreneurs spend years building up a business, but then fail to consider how to make the transition to retirement. A financial advisor can offer guidance in how to plan and overcome this hurdle. A financial advisor can help business owners with tax-effective retirement strategies.
Often times the death of a partner or major stockholder in a business can have devastating effects on both the business and the deceased partner’s surviving family. The business is concerned with gaining control of the deceased partner’s interest at a fair price so that it can continue operations without interference from the surviving family members. The family members are most concerned with receiving as much money as possible for their interest in the business and for capital that may be needed for estate settlement purposes.
To discuss business succession ideas, contact us today.
The Need for a Written Agreement
Absent a written agreement, the competing interests of the business and the family members could lead to major conflicts, litigation and possibly the forced liquidation of the business. A buy-sell agreement can ensure that the business interest of the deceased partner will transfer in an orderly manner to the benefit and satisfaction of all parties. With a buy-sell agreement in place, the stability of the business for it clients, employees and investors (or creditors) is more assured.
Key elements of a buy-sell agreement include a mutually agreeable sales price and terms of the sale. The agreement needs to be funded in order to ensure that the capital is available at the time of the death of a partner. Life insurance provides a cost effective means of creating the capital necessary to buy out the interests of the family and establish a reserve for the business to use to continue its operations.
Contact us today to discuss strategies for your business planning needs.
LPL Financial does not offer legal advice or services. Please consult with a legal professional regarding your specific situation.
