Hear LG on Succession

Hear what can happen if a business owner ignores planning for ownership and management succession:

A Son and Daughter

Fred

The Perils of Ralph

Two Kids

About Ownership and Management Succession (OMS)

At a certain stage in the life cycle of a closely held business, the owner typically considers the future ownership, management and control of the business. In many instances, both family members and key employees are considered as part of the transition strategy. The owner's overriding goals in these situations are to maintain stability so that family harmony is maintained and that the business prospers to provide security for family members, including the current owner.

Specific Services

When working with privately held businesses in OMS situations, our experience includes:

• Consulting with owners, family members and often key employees on their goals and perspectives about the business. The goals of the current owner may differ from those of the next generation, and gaining a full understanding of the landscape can be critical in developing the right OMS plan.
• Developing specific OMS plans to meet stated needs. For example, we have helped clients transfer the ownership of their businesses by gifts, outright sales, installment sales, sales to "defective" grantor and other trusts, self-canceling installment notes, annuities and other similar devices, and transfers to family limited partnerships or family limited liability companies. Sometimes, the appropriate result is a merger, acquisition, spin-off, split-up, or sale of some or all of the business.
• Creating documentation to address a wide variety of circumstances and events that could adversely affect the business. For example, our process considers the need to mitigate, and in some cases prevent, potentially harmful situations resulting from unexpected deaths, disability, retirement, divorce and even bankruptcy.
• Working with key, non-owners. We work with owners to develop plans to retain key employees before, during and after any ownership transition. In many instances, we help institute qualified and non-qualified deferred compensation, phantom stock and bonus plans, and statutory and non-statutory stock option plans. Some of these plans include non-competition, confidentiality and other provisions designed to protect the company's interests.
• Working with family members. Generally, parents want to treat their children equally in wealth transfer situations. We have worked with clients to develop distribution plans that provide security to family members and recognize a particular family member's unique contributions. Many times, clients ultimately decide that all family members should not have an equal ownership interest, management voice and/or compensation package.
• Estate Planning. As an adjunct to OMS services, we assist owners and their families with specific estate planning needs.