Passing Business Ownership To Your Children: The Pros
Business owners who pass ownership to the next generation can enjoy a unique set of perks that are not available to other entrepreneurs. Consider these examples.
Raising a child with the intention of passing the family business on to him/her someday instills a beautiful sense of familial pride in both the parents and the child. The child may be more likely to take on more responsibilities earlier, and the parents can trust that the business will be continued with the same integrity and value system they worked so hard to develop.
As the owner of a small business at the Lake of the Ozarks, not knowing the future of your business can be unnerving. By setting up a plan to pass ownership to your children, you can relax in the confidence of having a set plan that you can steadily work towards.
No matter how creative they are, most business owners eventually get stuck in a pattern or routine. They find their niche, discover what methods work for them, and stick to them. While this is not necessarily a bad thing, planning to pass ownership to your children allows the next generation to be more involved earlier on, which gives them the opportunity to provide fresh ideas for the growth of the company.
Passing Business Ownership To Your Children: The Cons
Unfortunately, transferring business ownership to your children also has some drawbacks. Here are a few examples of reasons why passing ownership on to your kids may not be the best idea for your business.
Tension In The Family
If you have more than one child, passing ownership to the next generation can get a little sticky. If you only appoint one child as the future owner, for example, the other kid(s) may resent this perceived show of favoritism. You will have to exercise care and consideration when choosing which child to pass ownership to and how to make the announcement to the family.
Tension In The Business
Keeping it in the family is one of the best things about passing business ownership to your children, but it can also be one of the worst. Sometimes, the insights we have into our family's personal lives can influence how we view them in a business setting. Not only that, but if we have an argument with a family member about a personal issue, it may impact our business dealings the next day.
Bias & Inappropriate Familiarity
Perhaps the worst possible drawback to passing ownership of your business to your children is that your affection for your children may cloud your judgement and cause you to pass ownership to less-qualified individuals. Because of your familiarity and intimacy with your children, you may also be tempted to remain more involved in the business than you should after you are no longer the official owner. While these challenges can be avoided, they can also pose serious problems if handled ineffectively.
O'Donnell Law Center Can Coach You Through The Process
Choosing what to do with your business after you retire is a big decision, and it is important to approach it strategically. If you are preparing to make this decision, it is important to consult with a business attorney at the Lake of the Ozarks. Your attorney will be able to help you evaluate all of the necessary factors and can provide insight into some of the potential outcomes. If you are in need of a small business lawyer at the Lake of the Ozarks, we hope you'll contact O'Donnell Law Center!
Call the most trusted law firm at the Lake of the Ozarks to get started today.
We Carry Your Burden ~ You Carry On With Life.
Disclaimer: No attorney-client relationship is created by the publication of this blog.
Phone: (573) 552-0317
O'Donnell Law Center, LLC
1026 Palisades Blvd. Suite 3
Osage Beach, MO 65065
(Located on the McDonald's Side of the Building)