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Our Expertise

Business Succession Planning

Family business succession planning can raise difficult emotional, financial, legal and tax issues. Yet a strong, tailored and appropriate succession plan for any business provides business stability and helps to avoid future conflict.

What is succession planning?

Business succession planning involves the considered transfer of management and control of a family business from one generation to the next.

When planning for this transition, it is important to consider what issues could arise in the longer term, so that you can identify ways to avoid them.

Early and appropriate succession planning will ensure the wealth of a family business transitions smoothly to the next generation, protecting all parties and stakeholders.

Ideally a succession plan should be considered early in the life of the business. It should be revised as the business matures and circumstances change.

What is succession planning?

A good succession plan provides financial certainty for the family during a difficult time.

It helps to avoid substantial unexpected capital gains tax, GST and stamp duty being incurred from the sudden transfer of assets and business ownership.

Having a succession plan in place may also reduce the likelihood of a dispute between family members and any unnecessary disruption to business operation.

What should I consider?

A tailored and appropriate succession plan should cover:

  • financial security of the outgoing generation in retirement;
  • ownership structures of business assets for the incoming generation;
  • processes for transferring these assets into the correct structures;
  • timing when control is to pass from the current owners to the next;
  • future role and remuneration of the current owners;
  • any interests of family members who are not involved in the business (if any); and
  • personal guarantees and other contingent liabilities.

An equally important consideration is what will happen in the event the principal family member unexpectedly dies or becomes permanently disabled.

Up-to-date wills and appropriate powers of attorney for family members should help to minimise stress in the event of a family member’s passing.

Case studies

Every succession plan is different. The following examples illustrate different scenarios and strategies we have experience:

  • Split of different divisions of a business between multiple children
  • Staged transfer of equity between siblings
  • Transfer of interest in trust structure with provisions for buyout of one sibling

Ensuring certainty where the assets of a family business are held through a discretionary trust. Carefully drafted succession deeds ensure the smooth transition to the continuing parties.

  • Maintaining separate equity holdings when whilst passing control to surviving sibling

Our experience

Russell Kennedy has a long history of partnership with families and businesses to establish succession plans.

We specialise in preparing succession documentation including shareholder agreements, succession deeds, wills superannuation nominations, with a focus on the protection of family assets and incomes. 

We listen to and work with our clients to develop clear and strong succession plans. We help plan for the goals of each business owner, the financial needs of each participant and the future operation of the business.

We also work collaboratively with accountants and other advisors to ensure no unintended consequences occur as a result of the transfer of assets and the business.

We make a difference for family businesses by supporting their long term business and succession planning objectives.

As experts in this area Russell Kennedy regularly distributes information and hosts seminars on this topic. To subscribe to our mailing list please click on 'Join our industry mailing lists' at the bottom of this page.