Business succession planning is a critical part of any business strategy. It needs to address the future management of the business, how ownership is going to be passed along as well as financial and taxation concerns. With family businesses, succession planning can be especially complicated because of the relationships and emotions involved.
The business owner needs to consider a number of important questions. What do you want in the future? Are your children capable of successfully managing your business or should you consider an external management team i.e. do you need to separate the ownership and management of the business. Once you have answers to these questions, you can consider the practicalities, especially any taxation matters that arise.
There are a number of areas to focus on when considering succession planning, including pensions, business assets, Wills, Enduring Powers of Attorney, transfer of business and additional reliefs and exemptions.
Succession Planning is often complex and time consuming. It is frequently an evolving process taking on a life of its own as the next generation matures and decisions are made about the path they may wish to take in life. The important of a well thought out Will as the first port of call in the process cannot be overstated. We cannot advise strongly enough against the fallacy that a business owner needs to wait to see how matters evolve before making a Will dealing with their business and other assets. A Will can be revised as often as one likes and it is significantly easier to update a Will that starting with a fresh page. Making a best efforts decision about the future ownership of your business and providing for that under a Will, as a starting point, is time very well spent and obliges business owners to take stock in a way which may well start the wider succession planning discussion.
In the context of Wills, many Irish people own property in other jurisdictions and careful consideration needs to be given about those assets and how they should be dealt with on death. By default, the succession laws of the jurisdiction in which real property is located applies and this may lead to consequences the Deceased Owner may not have understood.