Business Structure and Succession Planning: Helping Your Business Thrive

When it comes to running a successful business, the decisions you make about its structure and future succession are among the most critical.

A well-thought-out business structure not only helps with day-to-day operations but also plays a key role in minimising risks, optimising tax outcomes, and ensuring smooth transitions as your business evolves.

Similarly, succession planning is vital for securing the long-term viability of your business and ensuring that it remains a legacy for future generations.

We understand that each business is unique, and the decisions you make today can significantly impact your success tomorrow. We offer tailored commercial legal advice and services to help you choose the right business structure and develop a comprehensive succession plan that aligns with your goals.

What is a business structure?

Business structures refer to the legal framework under which your business operates. Choosing the right structure is critical, as it affects how your business is taxed, your liability exposure, and how you manage day-to-day operations.

Common business structures include:

• Sole trader: Simple to set up, but as a sole trader, the business owner is personally liable for all debts and obligations.
• Partnership: A business owned by two or more individuals. Partners share profits, losses, and liabilities.
• Company: A company is a separate legal entity that provides limited liability protection for its shareholders. It offers flexibility in ownership and can attract investment.
• Trust: A legal arrangement where a trustee holds assets on behalf of beneficiaries. Trusts are often used for asset protection and tax planning.
• Joint ventures: A collaborative joint venture business structure is an arrangement between two or more businesses to achieve a common goal.

Why is choosing the right business structure so important?

The right business structure can offer numerous benefits, including:

• Liability protection: Some structures, such as companies, limit personal liability, protecting your personal assets in case of business failure or legal action.
• Tax efficiency: Different business structures have varying tax implications and selecting the right one can help minimise your tax burden.
• Operational flexibility: Your company structure will dictate how decisions are made, profits are shared, and the business is managed.
• Growth potential: Some structures are more attractive to investors or easier to scale as your business grows.

At Lewis Kitson Lawyers, our experienced team assists businesses in assessing their options and selecting the best structure for their needs. We consider your business goals, risk tolerance, financial situation, and long-term plans to ensure your business is set up for success from the start.

What is business succession planning?

Business succession planning is the process of preparing for the future of your business, particularly in the event of a major change, such as retirement, incapacity, or death of key owners or management.

Detailed succession planning ensures that your business will continue to operate smoothly even after you are no longer at the helm.

Key components of a solid succession plan include:

• Identifying successors: Choosing the right person or group to take over leadership or ownership is crucial. This could be a family member, an employee, or an external buyer.
• Training and mentorship: A good succession plan involves mentoring potential successors and providing them with the tools and experience they need to take over effectively.
• Ownership transition: This involves deciding whether the business will be passed down to family members, sold to external parties, or transferred to employees.
• Legal and financial structures: Effective succession planning should also involve tax planning, asset protection, and legal structures that ensure a smooth transition and minimise any potential legal disputes.

Why is succession planning important?

Business succession planning is critical for ensuring that your business remains viable and continues to thrive after a leadership transition. Without a clear plan in place, your business may face uncertainty, financial instability, or even collapse when key decision-makers are no longer involved.

Some of the main benefits of succession planning include:

• Continuity: A clear plan ensures your business can continue without disruption, maintaining relationships with clients, suppliers, and employees.
• Stability: It reduces the risk of conflict among family members, co-owners, or business partners and ensures that the right people are in place to lead the company forward.
• Value preservation: A well-structured succession plan can help preserve the value of your business, especially if you plan to sell it or transfer ownership.
• Peace of mind: Having a business succession plan in place offers peace of mind, knowing that your business will be in capable hands when the time comes.

The key is to start planning

At Lewis Kitson Lawyers, we bring extensive experience and expertise to the table when it comes to helping businesses navigate the complexities of different types of business structures and succession planning by providing:

Tailored legal advice

We offer personalised commercial legal advice on the most appropriate business structure based on your unique goals and circumstances.

Asset protection strategy

Our Applecross legal team can help you design business structures that protect your personal and business assets from unnecessary risks, whether setting up a company, trust, or partnership.

Succession planning strategy

We work with you to create a detailed succession plan, ensuring your business is well-positioned for a smooth transition.

Tax efficiency

Our experienced lawyers collaborate with your tax experts to ensure your business structure and succession plan are tax-efficient, minimising liabilities and maximising wealth.

Dispute resolution

If disagreements arise regarding succession or ownership, our skilled legal team is experienced in resolving disputes efficiently and effectively, protecting the best interests of all parties involved.

Speak to an expert business lawyer to get started

The earlier you start your succession planning and business structure, the more control you will have over the outcomes.

At Lewis Kitson Lawyers, we are committed to helping businesses like yours build a solid foundation for long-term success. Whether you’re just starting out or are preparing for a leadership transition, we are here to provide the legal guidance and support you need, to meet your legal obligations.

Contact us today to schedule a consultation and begin securing the future of your business. We look forward to helping you navigate the complexities of commercial business law to ensure your business thrives for years to come.