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Business Succession Planning for Small Business Owners

Knowledgeable Houston Estate Planning Lawyers Serving Entrepreneurs and Business Owners in Sugar Land, The Woodlands and Throughout the Houston Metro Area

As a small business owner, you have unique estate planning needs that must be addressed to ensure a smooth transition when the point comes that you retire or can no longer run the business. However, transferring ownership of a small business—or even a family-run business—presents many legal hurdles. Family businesses are the backbone of the American economy and at the McCulloch & Miller, PLLC, our attorneys have extensive experience in business succession planning for small business owners. We will help you identify all the potential pitfalls and contingencies that may come up throughout the transition process and address them in advance.

What Will Happen to Your Business When You Can No Longer Run It?

Small business owners all eventually face the same question about what will happen to their business when they decide to retire or can no longer manage the business due to their sudden disability or death. If you take no action now, chances are that your family will be scrambling to come up with a spur-of-the-moment solution that, in all reality, is not likely to be the best option. Thus, it is important to consider the future of your business well before the need to transfer ownership arises.

Small business owners have several options when it comes to succession planning, the most common of which include:

1. Transfer Ownership to a Hand-Selected Person

Small businesses represent more than an income stream; often, they are a culmination of a business owner’s life’s work. Thus, most small business owners would prefer to pass ownership on to their children, family, or a key employee they trust that can effectively manage the business well into the future. While this may appear to be the easiest option, it still requires a business owner to identify and train a successor. Additionally, there are often significant tax consequences to the transfer of a business that must be accounted and properly planned for.

2. Sell the Business

Many family businesses are incredibly valuable and could command a high price in the market. However, this is less likely to be the case if family members are unprepared for the sale. This is where the importance of a buy-sell agreement comes into play. A buy-sell agreement is a contract that arranges for the sale of a business when a certain condition is met, usually the retirement, death or sudden incapacitation of the business owner. Buy-sell agreements come in many varieties and can be customized to the unique needs and desires of the business owner and their family.

3. Close the Business

In the event a business owner intends on closing their business when they can no longer operate it, there is still significant planning that needs to occur. For example, the closing of a business may require the sale of business assets, which will have tax implications on the owner’s estate. To close a business, someone must also file dissolution documents with the state.

A business owner’s decision regarding what they want to do with their business is a personal one; however, it is imperative that business owners consider all their options and plan ahead to ensure the orderly transfer of ownership.

Do You Need Assistance with Business Succession Planning for Small Business Owners?

If you own a business and have not yet put plans in place for the transfer of ownership, reach out to the business succession lawyers at McCulloch & Miller, PLLC, for immediate assistance. We have more than 35 years of experience helping small business owners identify all their options and carry out their goals. We also offer a wide range of estate planning services to small business owners to ensure that whatever decision they come to does not disturb the other arrangements they’ve made with regard to their assets. To learn more, and to schedule a free consultation with an attorney to discuss business succession planning for small business owners, contact McCulloch & Miller, PLLC, at 713-333-8900 today. You can also reach us through our online contact form.

Client Reviews
★★★★★
"In late February, 2020, I needed to file from out of state for successor Letters Testamentary in Harris County for my father's estate. The attorney I used, Ryan Cook, returned my call promptly, gave me the option of hourly or flat rate fee, explained what would be involved, then let his paralegal and other staff handle most of the contact with me. I worked with Crystal. She was very responsive and tech savvy. As the pandemic hit and communication everywhere was getting difficult and the probate court had limited access, these women continued to stay in touch and help me through the process, with us all working remotely. We were all experiencing a new way of being in the world and all three of them handled it with grace, humanity and efficiency." L.B.
★★★★★
"I would highly recommend this law firm because of their caring and professional staff. Mr. David Miller and Crystal Collins have gone above and beyond to help our family get all our elderly parents legal paperwork up to date. We are extremely appreciative for all they have done for us." A.B.
★★★★★
"I engaged the services of McCulloch & Miller to assist me with the difficult task of navigating Medicaid eligibility requirements for a close family member. I found them to be knowledgeable and thorough. Working with Darby was a pleasure. She took the worry and aggravation of dealing with a government entity off my shoulders. I highly recommend McCulloch and Miller for eldercare issues." B.S.
★★★★★
"We needed assistance with a Medicaid application and McCulloch & Miller were extremely helpful and expedited the paperwork promptly. We also greatly appreciated the professionalism, and caring manner in which Darby handled our case. If you need assistance, we highly recommend this firm!" P.M.