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Frisco Business Law Blog

4 aspects to consider when thinking about business succession

Over the years, you have likely formed a great attachment to your business. It has undoubtedly provided you with various opportunities for achievement and success, and you may wish you could continue running your company until you die. However, most likely you will choose to step down from your prominent position in the company when you reach retirement age or when other factors lead you to feel the need for change.

Of course, you want your business to continue to have successes even after you are no longer part of its operations. In order to give your company the best leg up possible, you will want to have a useful business succession plan in place. This plan could help ensure that trusted and responsible individuals take the reins after you step down.

A will is not a catch-all for estate plan information

Like many Texas residents, you may feel ready to begin estate planning so that your family will know your end-of-life wishes when the time comes. You may also have a similarity with other individuals in that you feel uncertain where to begin planning and what documents to use. Because of its usefulness and versatility, you may first want to consider creating a will.

Though you likely know that many people use a will as part of their estate plans, you may not want to consider the document a catchall for all of the information you hope to provide. While you can leave many details regarding your wishes in your will, you may want to understand what information to leave out or record elsewhere.

What Breach Of Contract Means To Your Organization

Multinational organizations and small family businesses alike rely on contracts to keep the company running smoothly. Whether the contracts represent legal agreements with vendors, suppliers or construction firms having the terms of the agreement broken can lead to business disruptions. To fully understand your risks and the legal options available to you, it's important to recognize the differences between various types of breach.

What does it mean that a shareholder filed a derivative suit?

Running a business involves making complex and perhaps even risky decisions in order to make it profitable and to find its place in the open market. As an officer or director of the business, you may be directly involved in many of those decisions. For better or worse, you do what you can to make the company a success and to make the shareholders happy.

The latter may not always be easy. You may make a decision that results in a significant loss, or miss an opportunity that may have provided significant success to the business. This is the nature of the business, but sometimes, shareholders believe that you mismanaged the company through your action or inaction.

Succession-Planning For Success

Succession planning can mean different things to different types of organizations. For a family business, it likely means grooming a son, daughter, niece or nephew to take over the company in the future. For a large multinational organization, it might mean the careful strategic bench-growing process necessary to ensure a strong manager is ready to take over when the current CEO retires.

The Benefits And Drawbacks Of Forming An LLC

One of the first critical decisions that a business owner needs to make centers on entity selection. Based on the goals of the new organization and the level of legal protection needed, there are numerous options available. From corporations (such as C and S corporations) to an LLC (limited liability company) to a partnership, a number of considerations go into the choice of entity.

A recent piece in Forbes noted that an LLC is generally the most popular entity selection, but there are benefits and drawbacks to this choice.

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Plunk Smith, PLLC
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