When you operate a business—especially one run by family members—having a succession plan is vital. There are numerous considerations when it comes to transitioning to new ownership or management, from tax issues to the choice of a successor. There is the possibility for litigation and disputes in Virginia Beach business succession planning.
The good news is that the right plan can typically resolve any disagreements and avoid costly litigation. Making the right moves can be challenging on your own, but you have the opportunity to rely on a skilled estate planning lawyer to review succession issues.
Common Causes of Disputes During Business Succession
Countless factors can lead to conflict and litigation during business succession in Virginia Beach. Some issues result from complicated family dynamics, while others are related to years of informal business operations and structure.
Valuation Disagreements
Part of planning for the succession of a business is first determining what the enterprise is worth. This can have an impact on the stability of the company and the plan for operation moving forward. However, there are many different ways to put a dollar value on a business, and some of them will result in different outcomes. Choosing between these methods can lead to conflicts and disputes.
Family Dynamics
When a company is family-owned, the dynamics between the people who work there can be complicated. There is often a sentimental factor present in family-owned businesses that can increase the odds of disputes, especially when the future of the company is unclear. Part of succession planning is having proactive discussions between the interested parties to get everyone on the same page.
Regulatory Challenges
One of the areas where the support of experienced legal counsel cannot be overstated involves regulatory and legal issues. This includes the complex tax implications of selling a business or transferring ownership.
There may also be problems involving necessary licenses and permits, particularly if they are in the name of the owner or an employee. Addressing these issues immediately can reduce the risk of litigation in the future.
Proper Planning Can Avoid Litigation
Disputes and disagreements during business succession are not only common, but they are also understandable. This is especially true when it comes to family-owned companies with multiple parties hoping to take over. These natural disputes and the litigation that can follow are why Virginia Beach business succession planning is so important.
One of the key reasons to take careful steps during this process is to preserve the value of the company. Years of hard work can slip away in the blink of an eye when a botched transition results in mistakes, disputes, or litigation.
The right plan will address everything from the transfer of power to setting long-term financial goals. It should also take into account issues like tax liabilities and the potential for restructuring.
Learn More About Disputes and Litigation in Virginia Beach Business Succession Planning
Litigation and disputes in Virginia Beach business succession planning can be avoidable. Often, it is possible to mitigate any conflicts and resolve those issues through careful planning. If you are ready to learn more about how the steps you take now can shape the future of your business, reach out for a private consultation today.
