You are running a thriving business in New York, but you do not want to work forever. If you were retiring from someone else's company, they could simply replace you, but as the owner, this transfer is not so straightforward. We at Codispoti & Associates, P.C., understand that part of a business's continuing success is in creating an effective succession strategy.
FindLaw explains that you will need to find the right person and start preparing him or her long before your planned retirement date. Whether your replacement will be a family member, an employee, or a recruit, he or she will need training to take on your role. Some business owners opt to transfer responsibilities gradually, allowing them to step back in stages.
There are a number of financial options you and your successor may choose from when determining how best to transfer ownership. For example, if your successor is a family member, you may simply want to gift your interest in the business to him or her. You could also establish a partnership.
If you are selling, the future owner could buy your interest outright at the time that you retire. Or, you could transfer your business interest through a buy-sell contract that is written and signed ahead of time with the purchase price to be the fair market value when you are ready to sell. You may also want to consider a self-canceling installment note, which requires the buyer to sign a promissory note and make payments to you over time.
More information about business strategies is available on our webpage.