North Carolina residents who own their own business can take steps to ensure that they have an effective succession plan for their business. There are various options they can pursue to transfer control of the business, such as establishing employee stock ownership plans or selling ownership of the business to family members, key employee or an outsider.
It is not unusual for the ownership of a business to remain within the family or with key employees for a long time. This results in the business becoming an integral part of the community in which it has been established. Owners of such businesses should make sure that that the actions they take regarding their succession plans ensure that work ethics and values central to the business are maintained.
It can be difficult to find the right successors among family members or key employees, specifically those who share the work ethic and values that form the foundation on which the business operates. Many times, the person who is deemed to be the right successor does not have the financial resources to buy the business, an issue that presents one of the most significant obstacles to transferring ownership to family or key employees.
For situations in which the desired successor is unable to afford to buy the business and is unable to obtain a loan from a bank, the owner of the business may serve as the financier for the purchase. The owner could extend credit, and a promissory note would secure the loan.
An attorney who practices business law may assist clients with navigating the legal aspects of buying and selling businesses. The attorney may oversee certain business transactions to ensure regulatory compliance. Additional services may include negotiating purchasing contract terms on behalf of clients to ensure that their interests and rights are protected.