Succession Planning for Family-Owned Businesses

For family-run businesses in Ontario, succession planning is essential to ensure continuity and protect the legacy built over generations. Without a clear plan, transitions can become complicated and emotionally charged, leading to legal and financial issues.

A proper succession plan involves identifying who will take over leadership or ownership, when the transition will occur, and how the transition will be funded and executed. It also includes updating shareholder agreements, revising employment contracts, and organizing tax-efficient transfer strategies.

In many cases, the plan may involve gradually transferring decision-making to a successor while the current owner steps back. It’s also wise to include contingency plans for illness, death, or other unexpected events.

Legal tools such as wills, powers of attorney, and trusts can play a role in succession planning. Business owners should also consider whether the incoming generation is prepared and willing to take over the business, or whether a sale or merger may be a better option.

To begin or update your business succession plan, contact Hilborn and Konduros in Cambridge, Ontario.