Business Succession: The Complete Guide

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Business succession is essential for all companies that intend to continue their work even after the founder leaves. In this process, both the assets and the responsibilities and demands of the company are transferred, so it is ideal that this process is carried out in advance and with planning.

In this complete guide on business succession, we will explain when succession is necessary, what types there are, why it is important to plan and what are the main conflicts that can arise throughout the process.

When is business succession necessary?
Business succession can occur due to a number of factors, such as the UK Phone Number Lead retirement or death of a key manager or the injection of capital into the company. When this happens, there is a transfer of power and capital from one generation to the next, or from one group to another.

Business succession can be:

Family: the main manager transfers the company to the name of his children or other relatives;
Acquisition of goodwill: the entrepreneur transfers part of the core activity to the interested party;
Labor: the successor assumes the labor obligations of the deceased.
Regardless of the reason for initiating the process, the succession needs to be carefully planned and evaluated by all interested parties. Some rules for succession can be decided upon when the company is incorporated and recorded in the articles of association. Or they can be defined later, when there is a need for the majority shareholders to leave.

It is worth remembering that the successor does not only receive the assets of the former owner, but also becomes responsible for any debts of the company, including those arising from labor claims.

The legal aspects of a business succession cannot be neglected and any failure can have negative consequences for those involved and for the health of the company. Therefore, it is a good idea to have specialized help from lawyers and accountants to carry out the process in the best possible way.

Why is it important to plan business succession?
Planning is essential for business succession to be carried out efficiently and without impacting the day-to-day running of the business. The first aspects that should be assessed are whether the candidates for succession are up to the task.

Therefore, candidates must be evaluated, tested and confirmed until the final decision is made. In the case of family succession, some prerequisites may be imposed to ensure that the successor is ready for the position, such as the requirement of a higher education degree or training course.

Before handing over the role to a family member, consider a few factors:

Qualities needed in a leader;
Thinking and values similar to those of the company;
Willingness to undertake ;
Ease of dealing with differences;
Knowledge of all stages of the business.
Next, you should start planning to include the entire company in the succession. Work teams must be prepared for the transition and willing to give attention and support to the chosen successor.

We’ve already talked more about business succession and how to make your company exist without you here on the blog .

What are the main conflicts?
As we said before, business responsibilities must be passed on gradually to ensure quality and peace of mind in the business environment. But this does not mean that all successions will be without conflict.

The main conflicts related to business succession are disputes between heirs, disagreements between partners and clashes of interests between successors. That is why it is so important to start the process in advance, get to know the successors well and prepare them to manage the company in the best way possible.

Ideally, successors should work in the company, even in other positions, to learn about the business, get to know the team and gradually start working. Over time, they will receive more demands and take the burden off the main manager.

If conflicts arise, try to talk, advise and guide your successors. With calm and planning, you can ensure that the company is in good hands.