Are you starting or expanding a business, or passing it on to successors? If so, Mackerer Law Offices can advise you on tax strategies and choosing the right entity for your company, and prepare for your departure from the business through succession planning.
When starting a business, it is important for the owner to understand that the type of entity impacts liability exposure and tax implications. The most common business entities are:
• Sole Proprietorship
• Limited Liability Company
Mackerer Law Offices can assist business owners in identifying which entity is appropriate for their newly formed or existing business. The firm can also file appropriate entity formation paperwork, such as articles of incorporation and articles of organization, and draft bylaws, partnership agreements, and operating agreements.
You spend years growing and sustaining your business, but have you determined what happens to your business when you are ready to leave? Whether your exit is planned or unexpected, Mackerer Law Offices can assist you in creating a succession plan that allows for a smooth transition of ownership. The following are just a few factors to consider when building a succession plan and exit strategy:
• Retirement, disability or death of the primary owner
• Sale of the business
• Passing of the business to family
Studies have indicated that only 30% of family-owned businesses successfully transition ownership from the first to second generation, with just 12% passing on to a third generation. The main causes for the low changeover rate are not having a second (or third) generation to pass the business to or the next generation is not interested in taking over the business.
It is estimated that nearly half of all family-owned businesses do not have a succession plan in place. A lack of planning should never be a reason for failure. Mackerer Law Offices, in conjunction with other professionals, can assist you in developing a succession plan that is right for you, your business and your successors.
For more answers to your questions about exiting your business, visit the IRS’ guide to closing a business.