Business Sucession Planning for the small business sector is hard going. One of the main reasons is that business owners are “time poor”. There is so much to be attentive to already, that succession planning can wait for another day.

Here are some tips for getting started with Business Succession Planning.

1.       Start a Word or Excel document called “Business Structure Summary”

• Have a new page for each legal entity / taxpayer (e.g. you, your spouse / partner, your company, your family trust, your self managed super fund)
• One each page list - ABN / ACN, TFN, officeholders, shareholders and major assets held.

2.       Decide who you want to leave each asset to

• There is danger in leaving a business to multiple children who have not demonstrated an ability to make business decisions jointly.
• If more than one child is to benefit from the business consider granting a small controlling interest to one of the children (so that decision making is not stalemated) and then increase the benefit to the other child or children from your other assets.

3.       Consider ownership and decision making control succession separately

• Ownership is often moved via leaving shares in the company to the children.
• Consider who will be the directors of your company after you have gone and how they are hired and fired.
• Consider who will be the Appointor / Principal under your family trust after you have gone. This person has power to hire and fire the trustee and put themselves in total control of the trust and all its wealth.

Online Business Sucession Resources

From www.onlinelegal.com.au:

Advanced Will

Enduring Power of Attorney LawPack

Executor’s Kit

Self Managed Super Binding Death Nomination