Handing over the Reins – Succession Planning for Businesses Poses Challenges
Jeffrey I. Fialky, Esquire
When a business has been built up by its founders over many years, how can it guaranty survival of the loss of one or more shareholders?
There are critical interests at stake in definitive long-term succession planning for closely-held businesses, including those that are family-owned.
Owners of closely-held business must plan well in advance to prepare for, and ensure the continued success of the company, following a triggering event such as the death, disability, or retirement of one of its shareholders.
For family owned businesses looking to carry the organization along through generations, the track record is ominous. In fact, according to the Small Business Administration, ninety percent of the 21 million U.S. businesses are family-owned, and one-third of the Fortune 500 businesses are either family-owned or family-controlled. Further, only 30 percent of family-run companies today succeed into the second generation and only 15 percent make it into the third generation. …
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by: Jeffrey I. Fialky, Esquire
January 22, 2007