Lisa Galvan Law, PLLC Blog

Wednesday, May 27, 2015

Three Ways to Plan for the Survival of Your Business

If you own a small business, it can be tough to think about the all-important “exit plan.” There are a host of questions:

  • Who will run the business when you are no longer around to make day-to-day decisions?

  • How will shares be distributed?

  • What are the tax consequences of all of this?

It can feel easier to put it off for another day.

At Lisa Galvan Law, we understand the importance of business succession planning to family harmony and the long-term health of a business, so we strive to make it as easy as possible for our clients in the San Antonio area. Here are three tools you can begin using right away to ensure that your business passes soundly to the next generation.

Preserving “Institutional Memory”

If you are like most small business owners, the “special sauce” that makes your business work is your own actions. As a result, the things that make the business what it is often rest with you, the proprietor. To ensure the continuity of your business, you need to find a way to pass on your knowledge--or your “institutional memory”--to the next generation of leaders. In your business succession plan, you can include advisors or other provisions to ensure that your hard-won knowledge is passed on to and utilized by the next management team.

Family Limited Partnerships

For those who want to keep business ownership within the family, family limited partnerships can be an attractive option. This option is a essentially a limited partnership, with your family members as the primary stakeholders. You retain control of your business while handing over ownership shares to your family. This minimizes the potential for conflict among family members later. Additionally, family limited partnerships can come with a host of tax benefits, though the IRS is vigilant about abuses. Talk to your attorney about setting up an FLP that works for your business.

Transferring Ownership to Partners

Oftentimes, business owners wish to reward vital employees by offering first rights to an ownership stake at a later date or by offering increased ownership shares to existing partners. To do so fairly and with minimal conflict, creating a plan for the valuation and distribution of these shares is vital. Working with your estate planning attorney, you can create a structure for ownership transfers that protect your stake while creating a workable plan for its successful transfer.

Talk to an Experienced Attorney

You have put everything into building your business. Let an experienced attorney help you ensure that it survives and thrives beyond your years. At Lisa Galvan Law, we provide a lifetime of business succession and estate planning services to families and small business owners throughout the San Antonio area. We can sit down with you, discuss where your business is and where you would like it to go, and build a plan that helps take it there. Contact us today to schedule a meeting with a San Antonio estate planning lawyer.

Lisa Galvan Law, PLLC is located in San Antonio, Texas and serves the following surrounding counties: Bexar County, Medina County, Comal County, Wilson County, Atacosa County, and Kendall County.

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