Of course, some are sold or wound up, but when businesses do fail it may be due, in part, to inadequate protection against poor succession planning; planning that is considerably broader than bringing on the next generation, education or promoting from within.
Consider the questions below to review how well your business is protected.
- Do you know which document(s), arrangement(s) or law(s) apply/ies to your business interests on your death?
- Do you know who will receive your business interests if you die before you gift or sell them?
- If yes, are they the ‘right’ business inheritors and do you think your family will receive the value you want them to?
- Do you have a Will?
- If your business interests qualify for Inheritance Tax Business Property Relief, does your Will enable specific additional tax savings?
- Are you sure that there are no conflicts between your Will (or the intestacy rules) and any business documents or other business protection arrangements?
- If you want someone else to buy your business interests on your death, are you sure they can afford to?
- Do you know who will receive your business partner’s business interests if they die? If yes, and if it’s not you, would you be happy to be in business with that person?
- Do you have documentation in place which enables you to purchase your deceased business partner’s business interests?
- Do you know what will happen to the business interest if you, or your business partner, get divorced?
- Do you and your business partner have arrangements in place to protect your business interests from your divorcing spouse(s)?
- Do you know who will deal with matters on your or your business partner’s behalf if an illness or accident results in loss of mental capacity?
- If yes, are you confident that they will act in your best interests?
- Do you and your business partner know which document or law ensures your wishes will be met?
- Do you have any enforceable arrangements in place to enable you and your business partner to resolve any disputes?
The results of this self-audit should be self-explanatory. If your business is fully protected, you are in the minority. If, however, you are not sure whether your business is fully protected and your objectives will be met, you should seek advice.
The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief depends on individual circumstances.
Succession planning may include the referral to a service that is separate and distinct to those offered by St. James’s Place.
The writing of a Will involves the referral to a service that is separate and distinct to those offered by St. James’s Place. Wills are not regulated by the Financial Conduct Authority or the Prudential Regulation Authority.