If you’re in business and you don’t have a plan for an involuntary or unexpected exit by any of the business partners, this tip is for you:
Create a Will for your business to shore up arrangements for a buy-out and nominate the triggers that could warrant such emergency action.
Failure to implement a business protection strategy could lead to conflict or confusion regarding the fate of a vacated shareholding which could also jeopardise the future of your business.
The process of creating a Will for your business begins with you and your fellow shareholders identifying and consolidating the triggers which may include death, disability, divorce or fraud that could warrant the buy-out of a shareholding.
These scenarios relate to an “involuntary exit” from the business, but you also need a plan for a “voluntary exit” should a shareholder wish to transition to retirement or explore an alternate career path.
We can provide advice, insights and coordinate with your team of aligned professionals including accountants, business valuers, risk advisers and lawyers, to help you create your Buy/Sell Agreement. The goal of the agreement is to articulate and confirm the triggers that could lead to a buy-out while indicating the formula used for calculating the value of each shareholding. Additionally, the Buy/Sell Agreement should outline how entitlements are to be dispersed in terms of Estates Trusts.
For more information about creating a Will for your business, contact your Grabowski Financial Planning
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