Continuing the Business
Choosing a successor
A successor is chosen by appointing a family member, employee or other individuals to take the owners place. Designating a successor in advance will help simplify the transition and set appropriate expectations. In addition, by providing guidance for continued operations and the future leadership of the business, employees can feel secure in their jobs.
Many business owners have basic loans or credits that help them operate their companies. What many people may not realize is that, upon a business owner’s death or severe disability, lending institutions have the right to call in the debt and force repayments of the loans. A business succession plan takes outstanding debt and fines of credit into account and provides information on how to manage the debt repayment. Particular funds or assets can be selected to repay loans and should be indicated in the Business plan.