Business Succession Planning

The successful continuation of a company is top-of-mind for business owners. Whether you're planning to transition out of your current role or transfer out of the business all together, business succession planning can help ensure your goals are met.

Business succession planning ensures the orderly transfer of business ownership - or transition out of a business management role - that meets the financial needs of the owner, and ensures that the business will continue to operate.

Business succession planning addresses many important needs of a business owner, including:

  • Setting the stage for an orderly transfer of ownership or management of the business.
  • Valuation planning and freezing techniques used to minimize the transfer tax costs associated with the transfer of a business interest to other family members.
  • Liquidity planning to ensure that sufficient liquid assets are available to pay estate taxes or to provide additional liquidity to the business during a period of transition.

The creation and implementation of an effective succession plan should include a thorough analysis of the underlying business, its management structure, competitive environment, and cash flows, as well as a mission statement that sets out basic procedures and policies for the business.

A business succession plan may address some or all of the following factors:

  • Proposed method of structuring the planned succession, including tax consequences.
  • Contingency plans to provide for unexpected future events, such as the death of a successor.
  • Formal timing for transfer of ownership.
  • Transitional roles for each individual in the business.
  • Communication of certain aspects of the plan to third parties and employees.
  • Possible shareholder agreements, Will revisions, corporate restructuring, share transfers, insurance policies, etc.

A CIBC Wood Gundy Investment Advisor, in conjunction with an Estate Planning Specialist* is an excellent resource to help you organize your affairs, identify your financial objectives and assist in the development and implementation of your business succession plan.

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