Do you have a business succession plan in place? Our Pasadena business succession planning lawyers can assist you with the structuring of a business succession plan or making alterations to a plan that might no longer fit your needs.
A family business requires a lot of work and there’s often plenty of pride in putting your efforts into building one. When it comes time to decide the next step, it’s not always easy to determine what that looks like. Should it be sold? Closed? Passed to another family member? None of these are easy questions to answer.
The decision of whether or not to sell your business is both emotional and financial in the best of times. In the wake of COVID-19 and the far reaching impacts this has had on the economy and throughout the world, it can be even more complicated to decide if now is the right time to wrap up a deal. There are several elements that you might want to consider if you are already thinking about the possibility of selling your business. For example, the possible increase in the capital gains tax is one opportunity to think about.
Paying 20% or higher in capital gains tax could be very significant and it is unlikely that a business closely held will appreciate in the way that a security option might after January 2021. One other option to consider as a tax strategy is to keep your business without having to bring in outside investors by discounting the overall value of the business and using those discounted parts to be placed into trusts for heirs.
Because of the shifting landscape around businesses and tax strategy it’s important to have the guidance from professionals. Schedule a consultation today with our business succession planning lawyers to talk through your current plan and whether you’re needed to pivot or update it in light of COVID-19.