How to ensure your business thrives through succession: a guide for owners

As a result of the pandemic and subsequent lockdowns, many business owners will have begun thinking about what would happen to their company if they get ill or unable to run it.

It might be that you expect one of your business partners to take charge; or, in some cases, that you transfer ownership to the next generation of your family. However, these options are not always as easy as they sound.

Ensuring the company you’ve spent so much time and energy building is in good hands when the time comes requires careful planning. Having a will in place guarantees proper management of the firm’s assets and shares in the event of your or your business partner’s death. Specifically, you should:

Think the future through clearly
Evaluate your successor’s trustworthiness and ability to lead the company ahead by reviewing the business plan you developed when you hired them. In the case of a limited liability business, new directors must be chosen before you may resign.

Recruit the appropriate personnel
If you can’t find an established partner, find someone with the relevant experience and expertise. With ongoing training and guidance, current staff can remain a solid and dependable force for the business despite its new leadership.

Inform the proper authorities
Any changes in the company’s directors must also be reported to Companies House.

Be aware of your tax obligations
It is possible that the new owner might take over your VAT registration. If you are part of a business partnership, you may also need to liquidate any shares you own. When a firm changes hands or is sold, it often raises intricate tax concerns. Always consult an expert for the best results.

While planning for a business’s future leadership, it is also important to consider the following.

• The organisational framework
• Power of Attorney in commercial transactions
• Why option contracts are necessary
• What occurs when shareholders disagree?

JW Hinks have over 125 years of experience supporting businesses to thrive and with our extensive knowledge of business succession, can successfully help you plan and prepare your business for new leadership. Call JW Hinks on 0121 456 0190 and let our friendly and professional team of experts put your mind at ease.