Business Succession Planning

Prasad & Company LLP provides expert estate and business succession planning. If you are going through a transfer of business ownership, personal wealth, or just planning for the future, the firm has a high level of experience and knowledge to assist in creating a smooth transition.

Prasad & Company LLP helps clients face the challenges encountered during these processes. The firm will guide clients in reaching their financial and business transition goals via a plethora of different services. These services can include exit strategy planning, business valuations, and financial and retirement planning. The firm can professionally represent either you or your business as an appointed trustee and/or executor.

Background:

A manufacturing client joined our firm while they were in the process of selling their business.

Strategy & Result:

During the initial consultation, we determined that the company had not applied for the SR&ED Investment Tax Credit in previous years and would likely qualify. We brought in a SR&ED consulting firm to assist in the engineering and scientific aspect of the claim. We prepared the amended tax returns. The SR&ED claim was successful and approximately $2 million cash was injected into the company. The resulting purchase price of the business was increased on a dollar-for-dollar basis.

Background:

Our client started their business in 1989 and has been very successful since its inception. However, the client was unhappy with its financing and business relationship with its bank.

Strategy & Result:

We provided alternative banking arrangements on a term key basis with minimal interference to the client's business.

Background:

Our client needed investment analysis information because the related recovery of funds from various levels of government can maximize revenue.

Strategy & Result:

We provided investment tools and analysis to the client's business and assisted them with enforcing legislative changes.

Background:

Mr. X and Mr. Y have been friends and partners in business and real estate investments. Mr. Y retired years ago, which left Mr. X responsible for business affairs.

Mr. Y continued to own shares in real estate investments with Mr. X. Mr. Y passed away suddenly, which left Mrs. Y to deal with estate matters. She did not want to continue owning his investments with Mr. X.

Strategy & Result:

We successfully divided assets held jointly by Mr. X & Mrs. Y, ensuring that personal objectives on both sides were achieved.

Background:

Our client started to plan a retail business concept in 2001. The retail store officially opened in 2002. After 18 months, the client decided it may be lucrative to sell the business.

Strategy & Result:

We assisted the client in a complete assessment of all of their business issues by preparing startup projections. We assisted in automation, financial management, and shareholder agreements. By developing operating budgets, performance evaluations techniques and models, we assisted our client in developing an appropriate strategy for a successful sale. Our in-depth involvement resulted in the sale of the business for approximately 17 times the original investment.

Prasad & Company LLP understands that most of your time is spent on building and operating the business as a business owner. As such, the concept of succession planning is often not seen as a priority. However, effective succession planning requires a structured approach to protect the financial well-being of your family, as well as your brand with customers, suppliers, and employees.

It is here where our team can provide expert estate and business succession planning to help you transition to your next chapter in life. Whether you are transferring business ownership, personal wealth, or just planning your future, the firm has deep experience and knowledge to help you navigate the challenges encountered at each step of the process.

What is a business succession planning strategy?

The business succession planning strategy lays out how the transfer of business ownership will occur once the current owner transitions out of their management role in the business. These strategies are essentially designed to support a seamless change of ownership without material disruption to customers or operations while optimizing the financial security and welfare of the current owner and their family.

Why do you need business succession planning?

While every business stands to benefit from precise succession planning, small businesses can find the practice particularly useful to identify and develop the talent required to take the business forward. In addition to that, there are several other reasons to build business succession planning strategies proactively:

  • The lack of a succession plan can contribute to financial underperformance and sub-par business results in the immediate aftermath of the transition as the new management team undertake the learning curve.
  • Small business owners often have a substantial portion of their net worth tied directly to the business they run. Therefore, a robust succession plan can maximize asset valuations and mitigate risks to the capital that current owners are banking on for their retirement needs.
  • Sudden death or disability that leaves the owner (or their business partner) incapable of operating the business can raise a serious question about the viability of the business’s future. A succession plan is the first step to managing the ‘key person’ risk that small businesses may face.

The importance of succession planning in a family business is heightened further. If a family member is going to be taking over a business, the business succession plan will need to be aligned with the estate plan. There may also be tax deferral opportunities that can be capitalized on. These considerations add further complexities when dealing with family business succession planning.

Our Benefits

From defining an exit strategy and building a long-term financial or retirement plan to determining the valuation of your business, our team of professionals help you:

  • Address your specific priorities – both financial and non-financial
  • Maintain the business’s value through the change in ownership
  • Reduce estate and income taxes payable
  • Preserve family bonds and relationships

We professionally represent either you or the business or work in the capacity of an appointed trustee and/or executor.

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