Why Your Business Needs A Succession Plan
One word: TAXES!
Tax surprises aren’t very pleasant, and they tend to be expensive. This is especially true when a business is involved. Tax liabilities resulting from an unexpected sale or wind-down of a business can be massive. Having a business succession plan in place will not only alleviate confusion amongst stakeholders and ensure the continuity of your business - it will save you taxes in the long run.
When your business has a succession plan in place you are in control over how much tax you pay. Your business can take the time to structure properly, plan income levels, and use every tax tool available to lower your liability. When you don’t have a plan you could be taken by surprise and end up paying massive amounts of tax at the highest possible rate.
You may be thinking your business is too small, or perhaps not complicated enough to warrant going through succession planning. The reality is that every business needs to think through the scenarios of succession and clearly know which strategies can be used to minimize taxes while maximizing wealth. That being said, when it comes to small business the stakes for tax liability are lower and the process is generally quicker and more simple.
As a general rule, as the complexity and size of a business increases, so too does the potential for tax liability. For businesses falling at the high end of this spectrum, having a plan is more critical and could involve other professionals such as lawyers and insurance advisors. Having a clear succession plan in place, working towards proper structures, possessing adequate insurance, and keeping long term tax implications in mind will prevent you from being surprised by a tax bill.
The bottom line: whether your business is small or large you need a succession plan. If you are using your business to generate wealth for you and your family, then you should have a plan in place to protect that wealth and make sure you get to keep as much of the money generated by your business as possible.
At Greg Evans Professional Corporation our team has the expertise to guide you through the process of succession planning. Greg Evans is a CPA CA with in-depth tax knowledge; he’ll make sure your company is structured with a succession plan that makes your overall tax liabilities as low as possible. Brian Rump, GEPC’s Director of Advisory, has a background in commercial banking and has witnessed firsthand the consequences of poor planning. Greg and Brian want to help you avoid common mistakes and ensure the continuity of your legacy. Book your free consultation today ((link at top and bottom of the page) to get started.
When you have a clear succession plan in place, you don’t have to worry about being surprised with a tax bill. With a clear plan you know exactly what to expect in terms of future taxes when you exit your business. You will also have the comfort of knowing that you are not paying any more taxes than you need to when succession takes place.
Book your free consultation today (link at top and bottom of the page) to get your succession plan started.