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Business Continuation

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Business Succession Planning – normally goes hand in hand with effective Estate Planning. As a business owner you have invested many years of hard work into your business. You have worked long hours, taken risks and made sacrifices that many others would never do. And now you have built up something worth protecting! If you are a Sole Proprietor, how would you or your family ever get the ‘fair market value’ of your business as a ‘going concern’ if you were unable to continue the business due to disability or death? If you have Partners or other Principals involved in the business, what would happen if they became disabled for a extended period of time or permanently?  

How long could they continue to be paid company profits when they are no longer productive? How and when would they be deemed disabled? Who would make that determination? What if a Partner or Principal died, how would their Estate be paid their share of the ‘fair market value’ of the business? These are some good questions – the kind that could keep a small business owner up at night if they do not have a proper planning place!

A Buy-Sell Agreement is a legal document that is the very cornerstone of business succession planning. It spells out exactly what the terms of the buy out will be between business owners. The agreement also ‘pegs’ the value of the business, thereby prearranging the purchase price for the buy-out to be executed.
 Many times a ‘Certified Business Appraisal’ is needed to establish the purchase price for the business. A properly drafted Buy-Sell Agreement provides for a business interest to be purchased in the event of death, total disability and/or retirement of a business owner. Having a predetermined plan of continuation and succession allows for an orderly transition of the business interest. This enables the business to survive and also allows the business owner (or their family) to get full ‘fair market value’ for their business interest as a ‘going concern’.

The issues regarding business continuation and survival are much more critical in small to medium sized businesses. Normally the business owner’s greatest asset is the business itself, which they have worked long and hard for (perhaps a lifetime).

Kelley Insurance & Financial is a leader in not only providing the most competitive product solutions to FUND your Buy-Sale Agreement, but also lending assistance in finding the most efficient way of funding the Buy-Sell Agreement. We work with many Metro area Attorney’s and Law Firm’s who focus their practice on Business Continuation Planning. Therefore, the proper recommendations and solutions can be put in place, including preparing all the documents required to accomplish your goals. We also work with our client’s council when they have relationships already established with Attorneys.

Don’t wait, call our office today for a no cost – no obligation assessment of your situation and we will make recommendations as to the best way to solve your ‘Business Continuation’ needs.