In 2012, Inc. Magazine posted an article listing the top 5 myths about selling your business. The number one myth was that business owners make is "not starting succession planning soon enough". With that said, we have included some articles that will hopefully get you thinking about how you will ultimately leave your business without feeling like you have left any cards on the table.
Succession Planning is Key for Business Owners
Tax Planning for Small Business Owners
Tax Planning for the Family Farm
A recent study by the Family Enterprise Foundation found that 60% of Canada’s family enterprises are set to be handed off to the next generation within the next decade. But not everyone is prepared. Shelley Forsythe, Director, Family Enterprise Planning for BMO Family Office, spoke to Wealth Professional about why succession planning merits attention and how advisors can help entrepreneurs take succession planning from strategy to execution.
Looking for help with your succession plan? Contact us to setup an in-person or virtual meeting, email@example.com
Between a pandemic, inflation, interest rates and potential recession, there’s not an entrepreneur on the planet who hasn’t had to tear up at least part of their business plan over the past three years. Now, with economic concerns continuing for the foreseeable future, many are wondering how this will impact their succession plans.
A recent Canadian Federation of Independent Business (CFIB) survey found that almost two in five owners have moved their exit dates. The report revealed that 17% of owners accelerated their timeline largely due to COVID-19-related stress, while another 22% are delaying their plans by at least one year because they’ve either taken on too much debt or the value of their company has declined.
John Paniccia, BMO Private Wealth’s Vice President and National Director of Business Advisory and Succession Planning isn’t surprised by these numbers given all the pandemic – and now economic – stress owners have been under. Many of the owners he’s spoken to are thinking carefully about their futures.
If you do want to plan an exit, there’s a lot to consider. Here are just a few things to think about.
Entrepreneurs who have built successful companies often want to see their business passed effectively to the next generation. However, a sale or transfer of ownership of the business will generally trigger capital gains tax. If the value of the shares of your business has increased, you or your estate may be burdened with a substantial tax bill. The business may even have to be sold to cover the liability. Family business owners could consider an estate freeze
Tim Eastwood, CFP®, CIM®, FCSI