Brundage Law P.A.

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Tips to avoid business succession disputes

On Behalf of | Jun 14, 2023 | Business Litigation |

Business succession is the process of passing a business on to another owner. For family businesses, this often also means giving that business to the next generation. In some cases, multiple heirs will all be involved.

Unfortunately for business owners, the succession process can sometimes lead to disputes. What can business owners do to make these disputes less likely?

Talk about the plan in advance

First of all, when a business owner is making a succession plan, they should consider talking to their heirs and sharing the details of their plan. The more that people know, the less likely they are to get engaged in a dispute. Additionally, talking to the heirs in advance means that they can discuss any of their concerns with you, rather than getting into a dispute with other heirs who are also inheriting the business.

Decide who to leave the business to

It’s also important for business owners to remember that they don’t have to leave the company to all of their heirs. Maybe one child has shown significantly more business intelligence and more dedication to running the company successfully. Other children could be given different assets, but they do not all have to be given a share of a business.

Start the training process early

Finally, business owners may want to think about choosing a successor and then bringing that individual into the business to train them as early as possible. It can often be difficult for someone to simply take over a business that they’re not that experienced with. But if the successor has been working alongside the current owner for years before taking control, they’ll have a much better idea of how to make things run smoothly.

Get the plan in writing

As with other aspects of starting or running a business, it’s critical to get everything in writing. A written succession plan can lower the odds of disputes amongst new owners. Unfortunately, though, some disputes are still going to happen. Those who are involved need to be sure that they understand all of their legal options. Seeking legal guidance can be helpful, as a result.