Whether you are the owner of a multinational corporation or a mom-and-pop corner store, your business is a significant asset for you and your family. As such, you need to devise a strategic succession plan for your business.

Your business succession plan does not necessarily only get initiated upon your demise. There are numerous ways to transfer the interest of a business to its successors while the principal owner is quite hale and healthy. Below is just one of them.

Family limited partnerships have several advantages

Suppose you have several family members working in different capacities in your family business. You want to ensure the continuity of the business both during your lifetime and in perpetuity.  By establishing a family limited partnership that has both limited and general partnership interests, you will be able to incrementally transfer your business interest to the family members you choose.

There are plenty of advantages to doing this. You can maintain a majority interest and control over the daily operations as long as is feasible. Because you are gradually divesting yourself of your interest in the business, there could be discounts for valuation due to marketability declines and minority interest. Saving money on taxes owed should always be a consideration.

Other options for business succession may also be viable

Don’t lock yourself into one business succession strategy until you have thoroughly examined the pros and cons of each possible solution. Because every business owner has unique circumstances, it is vital to review your choices with a business law attorney who understands the laws regarding business succession here in the Commonwealth of Massachusetts.