No one lives forever. At some point, every business owner has to hang up their hat and exit their business – whether they are selling the business to a stranger or passing the business on to family members or trusted employees. Unfortunately, most business owners (being busy running the business) don’t think about their exit plan until retirement beckons and they have one foot out the door. This often results in a rushed process where the business owner might not get the best bang for buck. In the case of family succession, the business owner is often left on the hook for the business debts after they have retired.
Generally speaking, planning for business exit should start 5 years before D-Day. That is usually enough time to coordinate your tax plan and retirement plan so that you clean out the cobwebs in your business to make it an attractive buy for the purchaser and de-risk yourself from any potential residual liability (particularly if you are passing the business to your family). The team at Your LegalHQ can provide tax and legal advice in the planning stages and prepare the legal documents (e.g. Sale of Business Agreement) at D-Day.