12.21.18 | Business Law

Tips to Plan to Retire From Your Business

Whether you are planning for the future or your retirement is looming near, you might be trying to figure out what is going to happen when you are ready to retire from your business. There are several choices. You might decide to sell it, let your children continue to run it, or dissolve it.

It is not always an easy decision to figure out what you want to do with your business when you retire. Here are some tips to help you decide.

You need to know how much your business is worth.

The first step to retiring, no matter what path you are going to take, is to figure out what it is worth. You may need help with this step because it can be complicated.

You are going to need to look at your assets and liabilities, as well as the profit you have been bringing in over the last few years. Together, you should be able to figure out how much your business is really worth.

If you decide to sell it, you will need a plan of succession.

A plan of succession is a detailed report of how you plan to sell your business to someone else. You could start the transition months before you retire from your business so that the new owner can see how you run it. If he or she decides to keep your employees, this will give the new owner time to meet them and see how everything works. A plan of succession will help to ensure that your business will run long after you step away.

If you have partners, make sure that you have a buy-sell agreement in place.

A buy-sell agreement determines who is allowed to buy the shares from one of the partners. This can come in effect with retirement and death. By having a buy-sell agreement in place, you are protecting your business and your family.

Don’t force your children to take over.

Many business owners dream of passing their beloved business on to their children. While some children can’t wait to continue the business, others want nothing to do with it. If you force them, it could get messy, and you could lose your children.

If you decide to close your business, you need to do it legally.

The legal way to close a business is called dissolving your business. Once you go through this process, you won’t be liable for it anymore.

Make sure that you are financially ready to retire from your business.

One of the most common reasons that people don’t retire is because they don’t have the money to do so. It can be even worse when you are a business owner because most people have a retirement fund that they start through their job. Because of this, you are going to have to start saving for your future. Every little bit counts so start putting as much money away as possible so you can enjoy the years when you aren’t working!

Planning to retire from your business can be scary. Though you may have always planned on passing it on to your children, they might not be interested. You should never force them to do something that they don’t want to do. It could really hurt your family dynamic.

Your other options are to sell or dissolve it. If you sell it, you should have a plan of succession so the process goes smoothly and your business lasts longer than you ever imagined. If you decide to dissolve it, make sure that you do it legally. That will ensure that you aren’t going to be held liable.

Contact us for all of your legal needs.

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Whatever your demands, Dungan & LeFevre is the full-service law firm you need. We can help you explore your options, guide you through challenges, and represent you in court. You can rely on our experience and knowledge to steer you to your best decision for the most reasonable price. Get started with a consultation.