As a California business owner, you have probably put a lot of blood, sweat and tears into developing your company. It’s equally important to identify who you want to succeed you in the ownership of your business. You must also decide how that individual will step in to receive an ownership business.
If that successor is a family member, important conversations need to happen about their interest in serving in this role or the requirements that he or she might have to take, such as paying for the portion of your business.
A succession plan is one key component of identifying a future for your business, but you can’t afford to neglect the possibility of a buy/sell agreement playing a critical role in enabling you to take action to leave the company if you need to do so. If you are one of a few owners of a business, it is critical that all of the owners together have a buy/sell agreement. This ensures that your ownership interest can be purchased by the other owners or by the business upon a triggering event.
Two of the most common triggering events include a disability or death that make it impossible for you to work in the company any further. The buy/sell agreement also outlines how the value of ownership interest will be calculated should this come to pass.
Without such an agreement, your ownership interest in the company will be determined by passing it on to your spouse or other family members and it is likely that you might not want this, and furthermore, that your loved ones or business partners might not want this either. Schedule a consultation with a business succession lawyer in California to learn more about the steps you need to take.