What is business continuation planning?
Simply, business continuation planning is developing – and then implementing – a plan of succession. Usually called a “buy-sell” agreement, proper business continuation planning answers the question: Who will take over my business should I die prematurely, become disabled, or simply decide to retire.
If you’re a business owner and you don’t have a buy-sell agreement, you may not have planned sufficiently for the future.
Depending upon how your business is owned, a buy-sell agreement can be established between:
- You and your parents.
- Your business and its owners.
- You and other family members.
- You and key employee or employees.
A properly structured buy-sell agreement will:
- Pre-determine who will receive your business.
- Set the purchase price and terms of payment.
- Establish the value of your business for federal tax purposes.
- Specify how the transfer will be funder.
- Provide the cash needed to pay federal and state death taxes, debts, and other estate settlement costs.
Other Planning Options
Here are a couple other business planning options:
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