Business structures and agreements have a direct impact on taxation, ownership control, transfer tax on gifts and estates, and shareholder access to cash flow, They also protect you by helping you achieve desired outcomes with partners, family, and key managers. Understanding how business structure affects the succession planning process is essential to a seamless transition.
Why Is it Important?
- Drives business success and longevity. Outlines details relating to corporate structures and agreements between directors, owners, and key managers.
- Avoids disagreements or differences of opinion. Appropriately designed, communicated, and coordinated stockholder, operating, and partnership agreements protect you from disagreements that can handicap the attitudes and enthusiasm of shareholders.
- Provides greater protection of your goals. Well-thought-out and documented business agreements provide greater certainty your expectations as a business owner will be fulfilled.
- Creates formal compensation and incentives. Employment and golden handcuff agreements create incentive compensation opportunities helping to drive performance and career commitment of key managers.