Do You Have a Business Succession Plan?
Attorney L. Reed Bloodworth is the managing partner of Bloodworth Law with offices in Orlando, Florida, and Winter Haven, Florida.
Do you have a business succession plan? Covid-19 forced business owners to quickly shift the way business run to remain successful. Can your business withstand the incapacity of a CEO? The divorce of a business partner?
What is a Business Succession Plan?
A business succession plan proactively outlines roles, responsibilities, and financial agreements to ensure the future of a company when major leadership changes occur.
Succession plans provide legal infrastructure needed for a business to survive the death of the CEO, a business partnership change, the loss of a key employee who retires, resigns, gets fired, or hired.
A succession plan should be included within a business operating agreement at the inception of a business. It allows a business to continue running smoothly with new or adjusted management and ownership changes so that employees, services, or products can be provided without disruption, loss of control, or revenue.
Succession Plans Provide Answers
What’s an example of what a succession plan should do? It can ensure a reasonable price is paid for a partner’s share of the business. This also will eliminate the need for valuation upon death because the insured agreed to the price of the business beforehand.
Watch the Bloodworth Law Video Series on what should be included in a
Business Operating Agreement on the Bloodworth Law YouTube channel.
Without a succession plan, a Florida business may end with the death of an owner, or make it incredibly hard for partners to control and continue running the business.
Plan for Your Business’ Succession Plan
After surviving the pandemic, it’s imperative that your business is ready for more unexpected changes. Start by keeping the business operating agreement and succession plan up to date.
Maybe you’ve been running your business without a succession plan or an operating agreement. In Florida, that can create an impossible scenario if something were to happen to an owner. Even a car accident can keep an owner or a CEO from managing the day-to-day needs of the business.
No one expects a sudden change, but you can be prepared by having an attorney review your succession plan or business operating agreement. Talk with Reed about what Bloodworth Law can do to help you, your business, and your family.Consider sharing this post