.. a planning opportunity for collaboration between your financial planner, your accountant and your lawyer
For all business operators, formulating Business Succession arrangements is an important process that should be undertaken. This is so regardless of whether the business operates as a sole trader, partnership, trust or limited liability company. We explore the reasons this is important.
Planning Business Succession provides for certainty for the stakeholders of the business entity and/ or its operations. In considering who the stakeholders are that will be at risk if a significant debilitating event occurs in the life of the key decision-maker(s) in a business, think about at least the following ‘groups’ –
- family members;
- employees;
- financial institution(s);
- customers;
- suppliers;
- landlord; and
- yourself.
The timing of planning business succession arrangements is important
The Last Will and Testament of an individual must be executed while the testator is mentally competent for the task. This ensures that the documentation will be valid and effective. Similarly, Business Succession arrangements must be formalised whilst the business owner is fit, well and mentally competent. The business and financial security of all stakeholders is best served when this planning is undertakensooner rather than later.
Reviewing Business Succession arrangements
There will be events in the life of a business that will give rise to a need to considering whether the existing planning is appropriate to the changed situation. This is another similarity to the Estate Planning alluded to in the previous paragraph. Significant life events trigger Estate Plan reviews; and significant business changes should trigger a review of the business succession arrangements.
The elements of Planning Business Succession arrangements
The key documents that constitute a Business Succession Plan, include –
We also commend business owners to undertake an Estate Planning exercise: refer our article (from a series of thirteen articles on Estate Planning matters) – Estate Planning and Business Succession Planning – which will be of particular relevance to families in agribusiness ventures.
Planning your business succession arrangements?
There are many elements to the process, and it is not unusual for a number of specialist advisers to involve. Depending on your circumstances these could include –
- Accountant – to provide business valuation advice;
- Lawyer – to advise on the appropriate terms of the agreements required to formalise the plans;
- Financier (Bank/ Broker/ Lender) – to ensure any arrangements don’t breach existing ‘covenants’;
- Financial Planner – to advise on relevant life insurance policies that will secure future funding requirements;
- Other specialists as appropriate.
Who coordinates planning Business Succession arrangements?
Continuum Financial Planners Pty Ltd has a structured process by which to advise you regarding business succession arrangements. Our team ia available to refer you to specialist advisers who can assist with the preparation of the appropriate plan for your circumstances. We act for clients so as to coordinate the process, using your existing advisory specialists or referring you to others if appropriate – and monitoring the completion of all aspects of the process.
To arrange an appointment with one of our experienced advisers, please
- phone our office, on 07-34213456; or
- at your convenience, use the linked Book A Meeting facility.
(This article was first posted by us, in May 2018. It has occasionally been refreshed/ updated, most recently in Junbe 2025.)