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Succession Planning

The closely held business owner dedicates many years to drive the success of his or her business. The culmination of the business life cycle involves reaping the rewards of the business’ appreciated value upon transition of ownership. Often the cashing out the value of the enterprise represents the key component of the owner’s pension or retirement assets. In addition, the transition of an operating business amongst family or friends inherently involves a variety of tax and non-tax issues. A properly designed succession plan will better ensure the business owner will maximize the realizable value while efficiently managing the transition of the business.

We typically discuss Succession Planning with our business owners early in the life cycle of the business even though the owner’s target date may be years to come. It’s important to craft the start-up and expansion strategies for the business with sufficient flexibility for the long-term business succession plan. Our Raleigh, NC succession planners will share insights as to tax advantages of various strategies, including: establishing a timeframe for executing steps in the plan, addressing the cash flow requirements for subsidizing the payout and how to best ensure the requisite liquidity will be available. Plan design may range from:

  • Buy/Sell Agreements
  • Qualified and Nonqualified Deferred Compensation
  • Stock Appreciation Rights and Phantom Equity Arrangements
  • Annuities (Secured and Unsecured)
  • Owner/Officer Life Insurance
  • Non-competition and Professional Service Agreements

Langdon & Company LLP works with the business owner to design and implement the business succession plan, as well as monitor benchmarks throughout the term. Often the selected plan design will require use of external resources (i.e. legal, valuation, or executive compensation professionals) and clients are free to have us coordinate with their existing professional relationships or leverage into a referral from our trusted professional network.