The Importance of Business Succession Planning in New York
In a recent study, an alarming statistic was given: only about a third of all New York family businesses successfully make the transition to the second generation and only 12% of businesses are still viable into the third generation.
So much time, money and effort goes into building a successful New York family business, you should ensure proper business planning is in place so your business will continue to thrive even after you are no longer able to run it.
If no plan is in place, the business formation will be passed down to the successors of the estate, acquired by other shareholders, or a combination of the two in Nassau, Suffolk, and surrounding New York counties.
New York Business Planning for a Family-Owned Business
In a family-owned business in New York, this may cause an uproar between siblings and other relatives or between those more active in the day-to-day operations and those who are less involved but received an equal or greater share.
If employees and clients of a larger corporation catch wind of the arguing, they may threaten to leave the company for fear of instability. If an ill-equipped person is tasked with being involved in meetings between shareholders, if they do not agree with business proceedings, they can delay production which could potentially lead to loss of business.
With a plan, the New York business entity will pass according to your wishes. Typically, New York succession planning involves either retention or buy-sell retention, although it can be tailored to best comply with your wishes.
Understanding Business Retention Planning in New York
Retention Planning involves keeping the business or shares within the family. With a retention plan, a spouse, children, or other relatives will retain control of assets in New York and surrounding areas.
Buy-Sell Retention Planning involves giving current shareholders or vital employees an opportunity to take a larger stake in the company. A fair valuation of shares will be determined and agreed upon by the business owner, then offered to the shareholders.
Don’t leave your New York business without a future. By planning ahead, you can determine procedures to follow and appoint a competent successor who will carry out your goals for your business into the future.
Russo Law Group, P.C. helps you and your loved ones handle Estate Planning, Elder Law, Special Needs Planning, Medicaid Planning, Trust & Estate, Guardianship, Small Business Planning, and Real Estate Law. We welcome you to contact our Garden City, Lido Beach, Islandia, or Manhattan, New York law offices to learn more about how we can help address your business succession planning legal matters.
If you have questions or concerns about Business Succession Planning, please don’t hesitate to contact the Attorneys with Russo Law Group, P.C.