Business transfer model 1 – Family transfer

Steps to a successful business transfer:

Step 1 – Align Family Goals

A successful transfer involves understanding each generation’s goals.

Step 2 –  Evaluate the Senior Generation’s Liquidity Needs

An evaluation of the senior generation’s future income needs should be conducted prior to structuring the transition

Step 3 –  Analyze the Company’s Finances

The business’s historical financial performance provides insight into what the company can handle in terms of a transaction as well as a range of values for the parties to consider a transaction.

Step 4 –  Evaluate Transfer Methods

Here we evaluate which path(s) to pursue in the ownership transition.

Step 5 –  Evaluate and Analyze the Tax Structure

The transfer methods will dictate the tax consequences to the senior generation, the next generation, and the company all need to be evaluated.

Step 6 –  Develop a Buy-Sell Agreement

In situations where the business will transfer to more than one owner, developing a buy-sell agreement is of great importance.

Cases

Business transfer model 1 – Family transfer
 

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