Section 10 – Estate Planning
The family business brings together a number of players, including shareholders, family members and employees. Over time, each player’s influence and interest becomes clear. In spite of disagreements and other problems that may arise, there is generally a common desire for the business to succeed.
The survival of a business will depend on the development and implementation of a succession plan. The manager of a family business who thinks about his or her succession plan will have to consider a number of issues:
- Continuation of the business;
- Development of children’s talents;
- Preparation of succession;
- Choice of successor;
- Transfer of ownership, leadership and control of the business;
- Adequate retirement income;
- Protection of family patrimony; and
- Reduction of income taxes.
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Owners who determine their objectives in advance and start the process for transferring their business early on have a better chance of succeeding. Owners have to plan when they will retire, their financial requirements during retirement and how the family business will contribute to those requirements.
Business succession planning should take place several years before the business owner retires.
This document is up to date as of September 3, 2020 and reflects the status of legislation, including proposed amendments at this date.