Attorney in South Side Chicago Assisting Business Owners
When business owners think about leaving their business, they often focus on issues like planning for retirement and addressing matters related to estate planning. However, during the business succession planning process, a business owner will usually want to ensure that the business will continue to thrive after they are no longer in charge. One important aspect of succession planning is business continuity, which includes making arrangements for the ownership and management of the business to be transferred to a new generation. Stock assignments and transfers can play an important role in business succession planning by ensuring that the business is passed on to the right people. By carefully planning how ownership shares are assigned and transferred, a business owner can ensure that their business will continue to thrive long after they are gone.
At The Marques Eason Law Group, we work with business owners, family members, and others to address issues related to estate planning and legacy planning. With our strong understanding of the laws that play a role in these matters, the options available to business owners, and the best methods of transferring assets while minimizing taxes and other expenses, we can help business owners create successful plans for business succession. We can provide invaluable guidance and legal assistance to ensure that business ownership will be transferred smoothly and efficiently while protecting the owner's financial interests.
Options for Transferring Ownership of a Business
By taking the correct steps to transfer ownership of stock in a business, a person can ensure that the business will be passed on to the desired successor. This can be an important tool in family businesses, where it is often desirable to keep the business within the family. Some options for transferring stock include:
- Buy-sell agreements - A business with multiple partners may have agreements in place detailing how matters will be handled when one partner leaves the business. This can include provisions for the remaining partners to purchase the departing partner's shares of stock. This can ensure that the business will continue to be owned and operated by those who have a stake in its success.
- Life insurance - To ensure that a business is protected, partners may take out life insurance policies on each other, and the death benefits from these policies may be used to purchase a partner's shares. For businesses with a small number of partners, cross-purchase agreements may be used in which each partner will hold life insurance policies on the other partner(s). For businesses with large numbers of partners, entity-purchase agreements may be used in which the business itself will hold policies on each of the partners.
- Gifting stock - Business owners may choose to gift their business ownership shares to desired successors. This can be a cost-effective option that will allow ownership to be transferred to one or more successors over time, and if the value of gifts is below the annual exclusion limit, gift taxes will not apply. A business owner may also use a will or trust to transfer stock to beneficiaries after their death.
- Selling shares to a new owner - In some cases, a business owner may choose to sell their share of the business to a new owner. This can provide the business owner with financial benefits, and bringing in new owners or partners may bring new energy and ideas to the business and ensure that it will continue to be successful in the years to come.
Contact Our Evergreen Park Business Stock Transfer Attorney
If you are a business owner who is looking to create or update a business succession plan, The Marques Eason Law Group can help you understand the options for transferring business ownership through stock assignments. We understand the legal and financial aspects of business succession, and we can offer guidance on selecting the best option that will meet your specific needs and goals. Contact us at 773-973-3755 to learn more about how we can assist with business succession planning and other aspects of estate planning.