Planning for every aspect of your business, from formation to growth, is crucial. However, you also need to plan how you will pass it down should you be unable to run it. And this does not necessarily mean when you die. Business succession planning is not only for death.
Here are two more situations when your plan can take effect.
Disability or incapacitation
You may become disabled or incapacitated, perhaps you may get into an accident or can get a serious illness, making it difficult for you to run the company. In such instances, the parties you selected to run it can assume their duties.
However, it will help to have a clause that discusses returning to your position when you become better or specify the conditions that will demand the plan to go into effect. Therefore, it helps to have a temporary document that can be used when you can’t handle your duties for a specified period.
When you retire, which can be at any age, your chosen parties can run the company. Further, an executive may retire, and they may do so earlier than you thought. Without a succession plan, it can take time to replace them, and this can affect your business. Thus, your plan should cover your retirement and that of other executives.
Business succession planning allows you to move your company to your loved ones or other chosen non-family members. This can be done when you retire, become incapacitated or die. Your plan will cover more than business ownership, as it can also discuss leadership.
It will be best to get legal guidance to create an effective succession plan, one that will protect your investment in different situations.