Succession planning is important when things change in your business.
You have worked hard to build up your business, so succession planning is important. 
Are you considering retiring or taking a less active role in running the business? You might think about passing things on to a family member or business partner, for example. Whatever you do, you’ll want to know all your hard work is protected for the future. 

How business succession plans help 

Making decisions about who will take over your business if you retire or are ill will keep things running smoothly. Making your plans early means you’re prepared if anything unexpected happens. You can plan ahead for your retirement with confidence and make good decisions for the future

Transferring ownership of your business 

You’ll need proper planning for the transfer process when the time comes. For example, you might want to hand over control of your limited company to your children or other family members. A shareholders’ agreement can make the process clear and reduce the risk of conflict later. 

Choosing who to take over your business 

You might choose a business partner, a senior manager or an external buyer. Without your day to day involvement, you’ll want to know they understand and support your vision for the future. 
Things you might want to think about include: 
skills, training and qualifications 
experience and knowledge 
commitment to the business 
You’ll also want to know whether the people you have chosen are ready for extra responsibilities. You might need to recruit new employees to help everyone manage. If you’re selling, you might not be able to act as a consultant in the sector for a while. Without your expertise, will the handover mean the products or services your business offers will have to change? 

Keeping people informed 

management. It’s best to take the initiative and keep them informed about your plans. For example, shareholders might want to know how you will protect their investment. 
If you’re planning to sell your business the Transfer of Undertakings (Protection of Employment) Regulations, usually called TUPE, will apply. You can proactively explain what this means for your employees. If some roles become redundant you must take certain steps and make payments. 
Legally you must give certain information about the transfer to employees along with a consultation period. You must also give certain information about your employees to a new owner. 

Information for HMRC 

Your tax position might change if you sell your business. For example, you might currently complete a self-assessment tax return each year as a self-employed person. However, if you stay on as an employee during the transition you might pay tax through the PAYE scheme instead. 
You’ll also need to let HMRC know if someone else is taking over tax responsibilities for the business. If you’re VAT registered you’ll need to transfer these responsibilities too. 

Emergency planning 

Your sudden and unexpected death would leave a big gap in your business. Leaving written instructions and useful information in a secure place will help. You should also have a properly written Will that explains your wishes. Otherwise, intestacy rules might lead to changes that you didn’t want or intend. 
Please get in touch if you would like to discuss your business succession plans. 
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