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Experienced Oregon Business Attorney

Businesses — particularly small businesses — in many ways serve as the foundation of their owner’s identity from both a financial perspective and a sentimental/legacy perspective. The blood, swea, and tears shed growing the business over the years must be treated with the respect and consideration it deserves.

Succession is a serious issue for such owners. After all, the owner must plan for what to do with the business in the event of death, incapacitation or retirement. If their ownership interest is transferred to the wrong individuals (i.e., left to an Oregon court to handle in accordance with standard laws), then the owner’s business legacy may be left in tatters.

Yellow Dog Legal offers comprehensive business succession planning services. Contact Attorney Nicole Schaefer to learn more about what you can do to plan for the future of your business.

Multiple Options for Transferring an Ownership Interest

Business owners can choose to transfer their ownership interest in a number of ways:

  • Assigning ownership interests to heir(s)
  • Selling ownership interests to a co-owner, partner, or employee
  • Selling ownership interests to a third-party
  • Selling ownership interests to the business

The path you choose will ultimately depend on what you’re attempting to get out of the process. Some business owners simply want to “cash out” and are fine with selling ownership to a third-party who will have the funding and know-how to manage the business effectively after the sale. Other business owners would rather keep the business “in the family,” as they feel it is an important part of their lifetime legacy.

Common Issues to Consider When Drafting a Plan

Updating the Business Valuation

After a business succession plan is drafted, it’s important to maintain and update the plan as time goes on. The structure and valuation of the business is likely to change significantly over time, and as such, terms must be updated to reflect any relevant changes you wish to incorporate.

Identifying and Implementing Funding Opportunities

Some parties that you wish to sell to (i.e., a co-owner or an employee) may not have the funds necessary to acquire ownership interests. There may be alternative funding opportunities available for those individuals, such as an annual payback scheme or a life insurance plan.

Conflicts Over Ownership and Leadership Roles

Changes in ownership are almost certain to cause friction, whether the ownership interests are transferred to family members or business-related individuals. The succession plan should be considerate of these potential conflicts and should seek to minimize them where possible. It should do so by clearly defining leadership roles and other conditions of the transfer.

Contact Yellow Dog Legal for Planning Assistance

Yellow Dog Legal is committed to providing comprehensive business and estate planning representation. In so doing, Attorney Nicole Schaefer takes on a highly-engaged, client-oriented counseling and advisory role, helping individuals with businesses — from mom n’ pop stores to promising startups — secure the legal protections they need to survive and thrive.

Succession concerns rank among the most important legal issues that a business owner (and this may include partial owners, such as partners and investors) will have to consider during their lifetime. After all, years of hard work could be flushed down the drain if ownership is transferred incorrectly and legal intervention is necessary — or if ownership is designed in such a way that the business will have to be restructured following the transfer.

If you’d like to speak to an experienced business attorney here at Yellow Dog Legal about any questions or concerns that you may have regarding succession, call Nicole at 971-350-8516 or complete an online intake form to schedule a consultation.