Keeping the 'family' business Charlottetown PE

If you know you're the next in line for family business management, read this article for a better understanding of your new position.

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139 Queen St
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(902) 368-2643
139 Queen St
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90 Av University
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Mrsb Tax Services
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139 Queen St
Charlottetown, PE
 
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Prince Edward Place
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Cameron Brian Chartd Acctnt
(902) 368-3100
Prince Edward Place
Charlottetown, PE
 

Keeping the 'family' business

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By Stephanie Regan

(NC)- "To fail to plan is to plan to fail," the old adage goes. In the world of family business, it's mostly understood that one day Mom and Dad will step aside and let the new generation take over. So, what's to plan? But if the family hasn't provided for an orderly succession, a position may be "up for grabs," and with emotion and family history affecting decisions, the handover might be anything but simple.

Succession planning becomes critical when the manager-owner starts approaching retirement age, or is in poor health. Chances are the younger generation is unsure how to raise such a touchy subject. That's why it's important to plan how the family business will be handed over.

One approach is to think of it as a process in which the family plans for the transfer of knowledge, skills, labour, management, control and ownership of a business between the founding generation and the next generation.

A succession plan should:

• Contain a statement about the distribution of ownership

• Identify the new leaders

• Explain how the new leaders are to be trained for their roles

• Define the roles of other key members during the transition

• Outline the details for the purchase or sale of stakes in business

• Detail taxation, legal and financial considerations

• Plan for retirement considerations

• Give a procedure for dealing with disputes and problems

• Contain a timetable for the succession

If you're thinking about succession, a call to the Canada-Ontario Business Service Centre (COBSC) could help. Specially trained business information officers are available to assist you when you call (1-888-576-4444 or TTY 1-800-457-8466) weekdays between 8:30 a.m. and 6 p.m. EST. The COBSC (www.canadabusiness.ca/ontario) works in partnership with business organizations all over Ontario to provide free government business information, tools and programs to the owners of small and medium-sized enterprises.

- News Canada