Corporate Retirement Succession Planning: Our Services

Everyone knows the importance of preparing a will to protect your loved ones when you pass away. But if you’re a business owner, your offspring aren’t your only “children” — you also have your company to think about. 

No matter how much you love your business and are proud of what you’ve achieved, you’ll most likely want to step away from it one day. Corporate retirement succession planning is crucial for protecting your legacy and ensuring you place your business in good hands.

What is corporate retirement succession planning?

Corporate retirement succession planning covers all the steps involved in preparing your company for life after you retire or move on. Above all, this means appointing a successor to take the reins and setting up instructions to ensure your business processes can continue running smoothly. In other words: Every company needs to keep operating over the long run.

Succession planning may also include aspects of personal finance to secure the economic futures of business owners. This can encompass personal retirement plans, setting up life insurance, and helping them meet their retirement goals by taking advantage of tax-efficient options.

Since a succession plan can be so all-encompassing, the professionals that help you to execute it may need to perform the role of financial planners, lawyers, business brokers, and more — with some variation depending on the individual’s needs.

Why retirement plans matter

The need to set up retirement plans is an oversight for many entrepreneurs. It can be tough to imagine your company being run by anyone but you — and others simply forget that they won’t be able to live and work forever. 

But if you want to be sure that your company stays afloat, no matter what, you can’t afford to procrastinate on corporate succession planning forever.

You’ll not only be protecting your legacy, but also the jobs and livelihoods of your workforce and the communities and customers you service. It’s hard to imagine higher stakes than that.

Plus, if you intend to hold company shares after your retirement, having a proper plan in place helps to protect your own retirement income (or the financial security of your family if they will hold shares instead).

Even if you’re nowhere near retirement age yet, a plan allows you to prepare for unexpected outcomes such as accidents or illnesses.

Without proper legal documents and instructions in place, it’s often tough or impossible for employees to continue operating as usual. There may be confusion around processes, causing stress for your team and leaving customers unhappy. This can result in a business going into liquidation or being purchased by a new owner. In contact, a plan gives business leaders the information they need to set the company up for success, or at least keep things ticking over.

Our services

At J Murray Law, we provide the following services to aid clients with corporate succession planning:

• Appointment of a successor 
• Retirement strategies 
• Buy-sell funding
• Creditor protection solutions 
• Cash flow planning for family and assets
• Selling the company to a new owner
• Management of employer-sponsored pensions plans and more for employees
• Creation of an exit strategy for business owners 
• Management of a director’s shares after they exit (including estate freezes and selling shares gradually)
• Mediation with family, friends, employees 
• Transfer of the business to a new owner through a sale

Making retirement plans for businesses: The process

Make no mistake — corporate succession planning isn’t a quick process. It can take between five and ten years to plan everything out in full, depending on how complex and large a business is.

Discussion

The first part of making retirement plans is all about discussing the future. Business owners and legal advisors must come together to discuss the needs of the company, who the business owner wants to succeed them, and the needs of their business and customers during the transition.

Creation of an exit strategy 

Once the advisor understands the company’s needs, they can use that information to create a solid exit strategy.

If a business owner wants to appoint a successor, this will involve preparing instructions for them and ensuring there’s a proper framework for the transition.

Or, in the case of selling the company, it will involve passing the business on to them through a sale. A legal advisor can also offer advice on whether you should transfer all assets and liabilities to the new owner or only sell certain components. 

These have different implications for tax, lifetime capital gains, and more.

Preparation for your financial future

Another part of succession planning will involve managing your own finances, in the form of company shares. 

Most business owners hold the majority of common shares for their own business, and they may wish to continue holding them even after there’s a new owner — this also allows you to maintain some direction and influence. 

Two of the main options are:

1. Estate freezes: Exchanging common shares for preferred shares, so you can redeem shares over time and allow new owners to purchase common shares.
2. Selling common shares gradually: Reducing ownership percentage over time,  so you can retain more control over the company while gradually passing the leadership on to new owners.

In both cases, it’s possible to receive an income from the shares during the transition., but an advisor can give you further guidance.

Why choose J Murray Law for retirement plans?

Decided that you can’t afford to overlook the importance of corporate succession planning any longer, but feel unsure about how to choose the right partner for legal services?

At J Murray Law, we understand this is a multi-dimensional process with many important considerations. As proud supporters of our local community in Ontario and its businesses, we strive to understand your individual needs and work with you to provide an appropriate strategy.

We also make it our priority to ensure you understand the legal aspects of what you’re doing — even when it gets complex.

Ready to start planning for your succession?

The process of corporate succession planning can seem daunting, and it might even make you emotional — but now you’re already thinking about it, it’s the perfect time to seize the moment and take action.

To learn more and get the ball rolling, contact Jeffrey Murray Law today.