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Elizabeth Howard
“Over the past several years I have used Roberts Legal on a number of different matters all of which have been awarded in my favour and I believe this is due to their diligence and their desire to represent their client to the best of their ability." 
Business Succession PlanningRoberts Legal offers a comprehensive Business Succession Planning services which complements our Business Risk Assessment and Estate Planning services for business owners. Our experienced Commercial and Estate Planning Lawyers assist co-owners of businesses to make and implement plans and agreements appropriate for their Business Succession Planning needs.
Often businesses evolve without much planning. Most people don't bother to think about what they would do if their business co-owner got ill or injured and was forced to retire let alone what would happen to the business if the partner died or they got in a dispute. Without proper planning a co-owner may find themselves in business with a former co-owner's executor, attorney, spouse, or other beneficiary and without any ability to buy out their share of the business. Problems associated with co-owners suffering an untimely death or injury as well as disputes between co-owners, all of which often lead to the financial ruin of the business ,can be managed by the consideration and implementation of a suitable Business Succession Plan. Business Succession Planning generally covers:
Buy/Sell Option AgreementsA Buy/Sell Option Agreement is an agreement between co-owners granting options to buy or sell their respective interest to the other(s) in the event of death, permanent disability or serious illness. Enforceable Buy/Sell Option Agreements overcome disputes in relation to buy outs associated with valuations, time of payments and funding.
Funding Agreements are agreements incidental to Buy/Sell Option Agreements and provide for the funding of the price for a co-owner's share in the event that an option to buy or sell is exercised. Funding is usually provided by the maintenance of personal insurances in respect of the co-owners, agreements in the form of vendor finance or a combination of each. In the absence of a Buy/Sell Option Agreement a co-owner's deceased estate might miss out on receiving a monetary payment for the co-owner's share in the business and/or the executor of the deceased estate or relevant beneficiary may find themselves involved in running the business or litigation with the continuing co-owners. Shareholders Agreements (Partnership Agreements)A Shareholders Agreement (like a Partnership Agreement) is an Agreement between two (2) or more co-owners of a business setting out their agreements with respect to the management of the business and roles and responsibilities of each of the co-owners. Shareholder Agreements also dictate the rights and obligations of co-owners in the event of a dispute or proposed sale of their interest in the business.
Anyone who is a co-owner in a business should have a Shareholders Agreement (if the business is carried on by a company) or a Partnership Agreement. These Agreements minimise the likelihood of a dispute by ensuring that the co-owners have considered the objects of the business and their individual roles, rights and responsibilities. Disputes between co-owners who have not signed a Shareholders Agreement are common as there has generally not been any prior consideration and understanding of the co-owners' respective commitments to the business or restrictions on dealing with their interest in the business. Generally, in the absence of a Shareholders Agreement there is nothing stopping a co-owner from transferring their shares in a company to a third party irrespective of whether the other co-owner(s) approve of the incoming co-owner. What are you risking?
The purpose of Business Succession Planning is to protect the value of your interest in your business for you and your family. If you are not sure of the value of your business use the Business Valuation Calculator to generate a free Indicative Business Valuation & Report. You will need approximately 10 minutes and you business' last three (3) year's Profit & Loss Statements. Where to Start?Download our Business Succession Planning Guide for more information. Set a date to sit down with your business co-owners to discuss the benefits of Business Succession Planning for your business.
Circulate the Business Succession Planning Guide and Terms Sheets to your co-owners to review prior to the meeting. The Terms Sheets will facilitate meaningful discussion and negotiations between you and your co-owners. Call us if you have any questions or to make an appointment once you have completed the Terms Sheets. Ask us a Business Succession Planning QuestionIf the information that you are seeking is not above please feel free to ask us a Business Succession Planning question. We will gladly provide you with our considered response.
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