For individuals who own a company, passing the business to another individual may not be at the forefront of their mind; but it should be. Succession planning involves creating a plan for another individual to either own or run the business after the person retires, becomes disabled, or dies. This process simply passes control of the business—or a share of the business—to another person through their estate plan. While passing a business to a loved one or employee may seem like an easy endeavor, it can often be more complicated than one would assume; for this reason, there are some detailed explanations to common Houston business succession questions below.
How Do I Pick a Successor for My Business?
Each business owner will look for different qualities when choosing a successor. For some, they know of a loved one that is excited to continue the success of the business. For others, individuals will select their successors from a pool of existing employees who have a hard work ethic and loyalty to lead the company. Business owners should carefully consult with potential successors to determine who they believe will manage the business best, once they have passed away. They should then name the successor in their estate plan as the new owner of the company.