A pair of New Jersey high school sweethearts married and not only started a large family together, but also started a successful real estate firm. The couple bought properties, built commercial estates and passed the success on to their children. Their children continued the success of their parents by making good decisions and sound investments for the business.
In the process of the family planning its real estate venture, they laid out plans to ultimately dissolve the successful company and cash in on their hard work. They hired a qualified real estate business attorney to help them with their plans to sell their multiple properties, and they liquidated their buildings as the time became right. The family enjoyed the fruits of their labor for years to come.
New Jersey Business Succession Planning
Part of starting and running a successful New Jersey business is planning for the end of the business. Whether it be to pass the business on to children or other relatives or to sell the business at a profit, having a succession plan is critical to running a successful business. Possible succession options for businesses include:
- Family succession
- Third-party sales
- Buy-sell agreements
Appropriate business succession planning will ensure that a business has a clear exit point. This will protect the business owner from IRS questions and a shortfall of assets. It will also make sure that the person the owner wants to run the business in the future is clearly in charge.
New Jersey Buy-Sell Agreements
Business owners who want to pass their businesses down to other family members should have proper buy-sell agreements in place. These agreements, drawn by an experienced New Jersey business law attorney, should specify the precise terms of ownership and the agreed price of the transaction. It should also specify how much each family member’s ownership share is worth. This agreement should further indicate a precise plan for what happens when one of the family members leaves the business, retires or dies.
Businesses with proper buy-sell agreements in place are more likely to avoid IRS scrutiny during the succession process. A qualified New Jersey business law attorney can help business owners draw up proper succession plans and buy-sell agreements. These experienced attorneys are well equipped to handle the details of whatever your succession plan may need.