Starting a new Oregon-based business can be exciting and fulfilling. An individual may work for years turning their entity into a thriving industry player. Over time, they may begin to draw back from their day to day involvement and think of stepping down to hand their company over to someone else.
The process of transferring a business from one leader to another is succession, and succession requires planning. It is a good idea for business owners to speak with business law attorneys about succession planning before it is too late. There are several important considerations that business leaders should make, and this post will touch just a few of them.
Things to think about for succession planning
One of the biggest hiccups that businesses encounter when it comes to succession planning is not having a new leader chosen in advance. A business leader may abruptly leave their post due to health or family concerns, and finding a suitable candidate for succession may become a rushed and ineffective process. Starting early on a succession plan gives the new leader time to learn what they will need to do once greater responsibilities fall on their shoulders.
Starting early also gives a departing leader time to figure out what their new path will be. They can, over time, hand over tasks to the new leader without dumping all responsibilities on their plate at once. Both parties to the succession plan can benefit from starting the process long before the existing leader is gone.
Make a business-specific succession plan
Different corporate structures may have different mechanisms for identifying power and ownership in particular leaders. The structure of a business may require the leader to sell shares or divest interests in order to remove themselves from their hierarchy of the entity. Knowing how a business is structured can help a leader and their business law attorney create an effective and efficient succession plan.
Not all businesses survive turnovers of leaders. There are no guarantees in the law, but succession planning can help some find stable ground to transfer power between parties. The advise of trusted business law attorneys can be invaluable to businesses and leaders contemplating this important process.