Unveil Your Business's Next Chapter withStrategic Succession Planning

Share Sale: You sell the corporation itself. You typically prefer this to access the Capital Gains Exemption and tax a cleaner exit.

Asset Sale: You sell specific equipment, lists, and inventory. Buyers typically prefer this to avoid inheriting hidden liabilities and to "bump up" the tax cost of assets. Negotiation often focuses on bridging the tax gap between these two structures.

A properly structured Shareholders' Agreement is critical. It should include provisions that prevent a shareholder's spouse from gaining ownership of shares in a divorce settlement. Often, this forces a mandatory buyout of the shares so the ex-spouse receives cash value rather than voting power.

If key employees (Management Buyout) lack the cash to buy you out, you essentially act as the bank. A VTB is a loan you provide them to buy your shares. To protect yourself, you must secure the note against business assets and potentially retain a board seat or veto rights until the note is fully repaid.

Five years is the "gold standard" for a smooth transition. This allows 1-2 years to clean up financials and "purify" assets, 2 years to transfer key relationships and institutional knowledge, and 1 year for the successor to lead while you are still available as a safety net. Starting later often compresses value.

The unwritten processes in your head are your business's biggest risk. We recommend a structured "download" phase: documenting key client histories, creating formal SOPs for decisions you make intuitively, and having successors shadow you in high-stakes negotiations well before they take the lead.

Uncertainty scares talent. Strategies like Phantom Stock Plans or Stay Bonuses can align key non-family management with the transition's success. They need to know they have a secure (and profitable) future under the new ownership.

Fair does not always mean Equal. Giving equal shares of a business to active and non-active children often leads to conflict. A common strategy is to pass the business assets to the active child (to protect the company's future) and use life insurance or real estate to equalize the inheritance for non-active children.

This is the most underestimated challenge. "Seller's Remorse" is real. We encourage clients to "retire to" something, not "retire from" something. Planning your post-exit life—whether it's mentorship, philanthropy, or a new venture—is just as important as the financial transaction.

Before negotiating a sale price, you need a personal financial plan that works backward from age 95. Factoring in inflation, market volatility, and healthcare costs helps determine your "Number"—the net after-tax proceeds required to maintain your lifestyle without the business's cash flow.