Business Succession Planning | William H. O'Rourke PC

Over 40 Years Experience

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Business Succession Attorney in Denver, Colorado

You’ve worked hard to get your business to the place it is now. While you may feel comfortable with your cash flow and managing day-to-day operations, no company is truly prepared for the future without a strong business succession plan. Even if you feel retirement is years or even decades away from you, none of us truly know what the future holds. Now is the best time to learn about your options for business succession.

With over 40 years of helping business owners just like you plan for their futures, I can help you map out a comprehensive strategy to ensure your hard work continues to pay off after you’re gone. Give me a call—William H. O'Rourke, P.C.—for legal guidance in Denver, Colorado and the surrounding area including Glendale and Aurora. I’m ready to help you plan for the future of your business.

Why Having a Business Succession Plan Is Important

It’s always surprising to learn how many business owners who’ve poured their heart and soul into their company, but have no concrete plan about passing control of the business after they’re gone. You may think you’re too young to make plans like this or that your employees and business partners will simply “figure it out” when the time comes. However, just like making an estate plan for your personal finances and family, you also need to craft a succession plan that’s specifically tailored to your business needs. There are a few key reasons why this is so important.

Prevention from falling into the wrong hands: Picking the right person to carry on the legacy of your business is no easy feat. You’ll need someone who’s not only skilled enough to carry out the job duties, but also someone whose values and goals align with your own. This should also be someone you trust and respect. If this decision is not made ahead of time, you’ll have little to no say in what happens or who takes over. This becomes especially important if you’re running a family business and want to ensure it stays that way.
Time to prepare the person: After you’ve gone through the process of choosing a successor, you can begin preparing them for the role they’ll someday step into. With enough time, you’ll be able to train them exactly how you want and have the peace of mind of knowing you’ve imparted your knowledge to them. Your business will live on as you intended and your clients’ needs will be handled.
Avoid taxes: By starting your succession plan early, you and your estate planning attorney can plan for tax expenses that will arise and implement plans to mitigate these as much as possible. This could include gift taxes, estate taxes, or income taxes.
Maintains the integrity of your business: In our modern world, branding is incredibly important. By planning ahead for your business’ succession, you can hold true to your company’s brand promise.

I would be delighted to get started on creating a comprehensive business succession plan or trust that reflects your wishes and gives you peace of mind.

Types of Business Succession

When you sit down with your lawyer, you’ll discuss your options for your business succession which can take many forms.

Sell it to a co-owner or sell your ownership interest (shares or LLC membership interests) back to your Company over time: If you already own the business with one or more people, an easy transition is to simply sell your stake to your co-owner, or sell back your shares to the other owners. This may even be written into your business plan as a buy/sell agreement, though it should also be outlined in your estate plan.
Pass on to an heir: If you have a family business, and you are fortunate enough to have family members who want to continue the legacy of your business, you’ll naturally want to pass it along to one or more of those family members who have shown the capacity to become good owners and stewards of the business that you have built. While this may seem relatively straightforward, this model can often result in in-fighting if certain family members feel they’re “owed” a portion of the business or its profits. Getting ahead of any potential conflict is key to ensuring a smooth transition.
Sell it to one or more "key" employees: Do you have one or more key employees who have shown that they have those intangible qualities to rise to the next level and become an owner? Are they likely to wake up in the middle of the night thinking about strategic issues affecting your company? If so, you may have an "in-house" exit strategy to the gradual sale of your business to one or such key employees. I can help craft the documentation that will allow you to protect your ownership (with "buy back" options) as you determine if your "super employee" has what it takes to become a great owner.
Sell it to an outside party: Very often, businesses are sold outright, usually through an "asset purchase" transaction to a third party interested in owning your business. Whether structured as an asset sale or a sale of your underlying ownership interest in the entity which owns your company, I have tons of experience, representing both buyers and sellers, in these transactions.

What the Plan Should Include

Every business succession plan will look a little different because no two businesses are alike. That said, there are a few basic elements that all plans should have. This includes:

Naming a successor
A general timeline for how and when the succession will take place
A comprehensive valuation of your business
An updated set of standard operating procedures (SOPs) and any other documents like employee manuals
A detailed description of how your successor will purchase the business from you

Business Succession Attorney in Denver, Colorado

If you’re in the Denver, Colorado area and are interested in hearing more about how a succession plan can help your business thrive, reach out to me. My firm—William H. O'Rourke, P.C—is here to help individuals and businesses throughout Colorado move forward with confidence. Set up a consultation today.

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Ste 1000
Glendale, CO
80246

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Denver, CO
80230

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Sunday: Closed
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