Business Formation and Succession Planning
The Business Planning Team at Estate and Elder Law Advisory PLLC • Sharon, MA Estate Planning and Elder Law Firm
At Estate & Elder Law Advisory, PLLC, we understand the intricate nature of starting and securing the future of your business. With our legal acumen rooted in professionalism, experience, and trustworthiness, we offer personalized and comprehensive solutions tailored to the unique needs and goals of each client. Located at the heart of Sharon, MA, our seasoned team is skilled in complex business planning strategies, ensuring that your business and family interests are protected for generations to come.
Our Approach to Business Formation
Start Strong: Launching a business is more than a legal process—it’s the foundation of your future success. We guide you through selecting the optimal business entity, from limited liability companies (LLC) to corporations and partnerships, ensuring your venture starts on solid ground with robust asset protection and tax planning strategies.
Plan for Success: Our business succession planning services are designed to safeguard your business through life’s unforeseen events. We specialize in crafting detailed buy/sell agreements and succession plans that address potential retirement, disability, or death of a business owner. With our guidance, you can ensure that your business transitions smoothly to the chosen successors, be they family members, key employees, or external buyers, while minimizing tax liabilities and avoiding unintended consequences.
Personalized Solutions: Recognizing that each business has its own unique challenges and opportunities, we offer tailored solutions that reflect your specific situation. Whether it’s facilitating the continuous management of your business or providing tax-efficient strategies, our aim is to help you and your family maintain control and maximize the value of your business.
Our Business Planning Services in Sharon
- Business Entity Formation: Legal advice on selecting and forming the appropriate business structure to meet your objectives.
- Buy/Sell Agreements: Crafting agreements that protect your interests and ensure smooth transitions under any circumstances.
- Business Succession Planning: Comprehensive plans that secure the future of your business, addressing key issues such as leadership continuation, tax implications, and family dynamics.
- Tax Planning: Strategies to minimize your tax liabilities, ensuring more of your hard-earned success is passed on to the next generation.
- Asset Protection: Guidance through the creating business ownership strategies that separate business and personal assets to guard owners from creditor or litigation issues.
Coordinating Financial and Estate Plans
If your financial and estate plans are not carefully coordinated, there may not be enough cash to fund your objectives. An appropriately-funded estate plan can meet all of your people-planning objectives and provide liquidity for estate taxes (and business debts). Life insurance, owned in the proper amount, type and manner, may be effectively used to fund such money matters.
The Business Buy-Sell Agreement (BSA)
A BSA is a lifetime contract providing for the transfer of a business interest upon the occurrence of one or more triggering events as defined in the contract itself. For example, common triggering events include the retirement, disability or death of the business owner. An interest in any form of business entity can be transferred under a BSA, to include a corporation, a partnership or a limited liability company. Also, a BSA is effective whether the business has one owner or multiple owners.
As a contract, a BSA is binding on third parties such as the estate representatives and heirs of the business owner. This feature can be invaluable when the business owner wants to ensure a smooth transition of complete control and ownership to the party that will keep the business going. Subject to certain Family Attribution Rules under Internal Revenue Code § 318, a BSA can help establish a value for the business that is binding on the IRS for federal estate tax purposes as provided under Internal Revenue Code § 2703.
Entity Buy-Sell, Cross-Purchase Buy-Sell and Wait-and-See Buy-Sell Agreements
A BSA is commonly structured in one of three general formats: An Entity BSA, a Cross-Purchase BSA or a Wait-And-See BSA. Under an Entity BSA, the business entity itself agrees to purchase the interest of a business owner. Conversely, under a Cross-Purchase BSA, the business owners agree to purchase one another’s interests. The Wait-And-See BSA gives the entity a first option to purchase the interest before the remaining business owner(s).
In addition to these three general formats, a One-Way BSA may be used when there is one business owner and the purchaser is a third party. The selection of the appropriate BSA format is critical for a variety of tax and non-tax reasons beyond the scope of this discussion. However, no BSA is complete without a proper funding plan. Like a beautiful automobile without fuel in the tank, a BSA without cash to fund the purchase is going nowhere.
Funding a Buy-Sell Agreement
Some common options to fund the purchase obligation under a BSA include the use of personal funds, creating a sinking fund in the business itself, borrowing funds, installment payments and insurance. Of these options, only the insured option can guarantee complete financing of the purchase from the beginning. Accordingly, a proper BSA will include both disability buy-out insurance and life insurance. Since the health of the business owner determines their insurability, any delay in acquiring appropriate coverage could be fatal to the success of the BSA and, with it, the survival of the business itself.
How Estate & Elder Law Advisory is Different
Professional and Trustworthy: Our firm is recognized for its professionalism and the trust clients place in our advice. We are committed to providing high-quality legal services that business owners can rely on.
Accessible and Proactive: We demystify complex legal processes, making business formation and succession planning accessible to all. Our proactive approach ensures that you are prepared for the future, with comprehensive solutions that address all potential scenarios.
Create and Plan for Your Massachusetts Business with Confidence
We serve small business owners looking to start a new business, protect their assets, and ensure their business thrives through generations. Our clients value the astute guidance of Business Planning Attorney Artika Angel to navigate the complexities of business formation and succession planning with confidence. Book a call with our office to learn more about how we can ensure your business thrives for generations to come.
Secure Your Family’s Legacy with Us
Start your estate planning journey with a team that combines legal knowledge with genuine care. At Estate & Elder Law Advisory, PLLC, your future is in capable hands. Book a call with Attorney Artika Angel today and take the first step towards securing your legacy.
