Business Law

Starting your business succession plan might feel overwhelming. You’ve poured years of hard work, passion, and dedication into your company, so taking the first step towards transitioning can feel emotional and intimidating. However, having a clear succession plan is one of the best ways to ensure the longevity of your business, preserve your legacy, and maintain the well-being of your people. Here’s a straightforward guide on where to begin with your business succession planning to help you develop a grounded, thoughtful, and values-centered approach. 1. Clarify Your Vision and Goals Before diving into the details, take time to reflect on what truly matters to you. Are you most concerned with your business continuing to operate in the same manner? Is financial security your primary goal, or is it more important that family or long-term employees remain involved? Defining these fundamental goals early sets a meaningful foundation for your entire plan. Need help defining what it is exactly that you’re passing on? Check out this article. 2. Start Early and Plan Thoughtfully Succession planning is not a last-minute task—it’s a process that is best pursued through careful thought and early action. Begin the discussion with key stakeholders, such as family, employees, and trusted advisors; and do it sooner than you may feel “ready”. Early conversations help reduce stress and provide everyone involved with clarity about future expectations and responsibilities. 3. Identify and Prepare Potential Successors Whether you’re considering family members, current employees, or external candidates, clearly identifying your ideal potential successors is essential. Evaluate their skills, values, leadership style, and genuine desire to lead. Once you’ve identified possible successors, you can create plans to help them develop any necessary skills and experience over time. Read more about leading and passing on a business of values. 4. Get a Professional Business Valuation Understanding your business’s true value is crucial in creating a fair and realistic succession plan. A professional valuation provides clarity about your financial position, enabling you to make informed decisions about structuring the transition and ensuring the longevity of your company.  Seek out a trusted referral to a business valuation expert, so you can have confidence in the results. 5. Choose Your Transition Method Will you gradually transition ownership, or all at once? Will you pursue the complexity of an employee stock ownership plan (ESOP)? Or sell directly to a key employee, pass the business to family, or sell to an external buyer? Each method has unique advantages and challenges. Deciding your options early allows you ample time to navigate any complexities and prepare all parties involved. 6. Develop a Comprehensive Timeline Establishing a clear timeline ensures everyone involved knows what to expect and when to expect it. Your timeline should include milestones like leadership training, partial equity transfers, or gradual transition of operational control. This clarity helps reduce uncertainty and maintains business stability throughout the process. 7. Create Contingency Plans Even the most thoughtful succession plans can encounter unexpected challenges. Having contingency plans in place, for scenarios such as health issues, sudden changes in successor availability, or market shifts ensures your business remains protected no matter what. 8. Engage Experienced Advisors A business succession plan encompasses a range of complex legal, financial, and emotional considerations. Engaging trusted professional advisors experienced in succession planning, such as attorneys, accountants, and financial planners, as well as trusted personal advisors, like mentors or pastors, ensures your decisions align with best practices and your personal values. At MSB Law, we recognize the importance of a well-planned succession strategy. We are committed to helping business owners like you develop plans that not only secure your business’s future, but also honor your values and legacy. Our approach is always values-driven, focusing on your unique needs and goals. Ready to start your succession planning journey? Contact MSB Law today to speak with one of our experienced attorneys about how we can help you develop a customized succession plan tailored uniquely to you.

As tax season approaches for business owners, staying informed about potential tax changes and taking proactive steps can make all the difference in protecting your financial future. Whether you’re a growing business owner juggling multiple ventures, or a long-time entrepreneur focused on transitioning your companyto the next generation, preparing early can help you navigate shifting tax laws with confidence. What Tax Changes Could Be on the Horizon? While 2025 tax laws aren’t set in stone, discussions are underway regarding potential changes that could impact individuals and businesses alike. These changes may involve adjustments to income tax brackets, available deductions, and business tax credits — all of which can significantly affect your business and financial plans. Proactive planning is essential to avoid unexpected tax burdens. DJ Kim, one of our trusted business and tax attorneys, emphasizes the importance of staying ahead: “Tax laws are always evolving. The best way to protect your assets is to regularly review your business and tax plans, and adjust for any anticipated changes before they go into effect.” Tailored Tax Strategies for Every Values-Driven Business Owner No two business owners are alike, and tax planning should reflect that. For the hands-on business owner — the one who thrives on getting involved in every aspect of their business — tax season presents an opportunity to dive into the details. This type of entrepreneur benefits from regular tax strategy sessions and exploring every deduction or credit available. Partnering with an experienced tax advisor can help maximize savings without overlooking critical details.  That’s one reason we provide free referrals to trusted CPAs, and to other financial professionals, for all our values-driven business owner clients. On the other hand, the legacy business owner — someone focused on succession planning, and seeking to pay their company forward while reaping thebenefits of their hard work — may prioritize minimizing estate taxes and ensuring a seamless and cost-effective transition for the next generation. Trusts, gifting strategies, and long-term tax planning can protect wealth while honoring the future vision for the business. How to Stay Ahead in 2025 Start Early: Gather your financial documents and schedule time to review them with your tax advisor. Plan for the Long Term: Work with trusted professional advisors (business lawyer, CPA, CFP, CFO, or others) to create a comprehensive tax strategy that aligns with your business and personal goals. Embrace Flexibility: Tax laws can change quickly, so regular check-ins with your trusted advisors can help you plan ahead, and then pivot when necessary. Explore All Options: Research available credits and deductions specific to your industry or your unique business model. By taking a proactive approach, both hands-on business owners and legacy-focused entrepreneurs can navigate tax season with greater confidence and efficiency. Partner with MSB Law for Proactive Business and Tax Planning At MSB Law, we understand that every business owner has unique goals and challenges. Our team is here to provide values-driven business owners with the knowledge and insights needed to prepare for the future, no matter what tax changes may come. Schedule a consultation today to discuss your business and tax strategies, and ensure you’re ready to take on tax season 2025 with confidence.

The CTA requirements for Beneficial Ownership Information (BOI) reporting have been in flux due to ongoing litigation. Business owners are understandably concerned about compliance, but recent developments have clarified the immediate obligations—or lack thereof—for now. The Timeline of the Litigation The BOI reporting requirements stem from the Corporate Transparency Act (CTA), a law designed to combat illicit financial activity by requiring certain companies to report details about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN). In recent months, the enforcement of these requirements has faced legal challenges. Initially, a preliminary injunction was issued to halt the enforcement of the BOI reporting requirements. This stay was subsequently lifted, only to be reinstated again. Now, the federal government is actively appealing the latest stay, leaving business owners in a state of uncertainty about their obligations. FinCEN’s Current Guidance Amid this legal back-and-forth, FinCEN has addressed the concerns of business owners. According to FinCEN’s official statement, companies are not required to comply with the BOI reporting requirements while litigation is pending. The agency has assured stakeholders that additional guidance will be provided in the future, once the legal matters are resolved. For the most up-to-date information, FinCEN recommends monitoring their official BOI page. What Should Businesses Do Now? While no immediate action is required, business owners should stay informed and be prepared to act when the legal uncertainties are resolved. Here are some practical steps to take: Monitor Updates: Keep a close eye on announcements from FinCEN and legal updates regarding the appeal. Understand BOI Requirements: Familiarize yourself with the reporting requirements outlined in the Corporate Transparency Act, to ensure your company is ready to comply if enforcement resumes. Consult Legal Counsel: If your business may be affected by these regulations, seek advice from a legal professional to ensure you’re prepared for any future developments. Moving Forward The shifting landscape around BOI reporting highlights the importance of staying informed and proactive. At MSB Law, we are closely monitoring this situation and are here to help business owners navigate the complexities of compliance. If you have any questions about how these developments might impact your business, contact us for expert legal advice.

When planning for the future of your business, one of the most significant decisions you face is defining what exactly you’re passing on. The “what” of succession planning sets the foundation for everything that follows—determining how the transition unfolds, who benefits from it, and what role you will have once the transition is complete. It’s not just about handing over control; it’s about ensuring the process reflects your values and goals while protecting your legacy for years to come. So, what are you actually transitioning? Here are some key factors to consider when defining WHAT you’re passing on: Company Ownership vs. Specific AssetsFirst, decide if you’re transitioning ownership of the company as a whole or just certain assets owned by it. Are you transferring full ownership of the entire corporate entity for someone else to run and lead? Or do you want to pass along just specific assets such as property, key equipment, or even customer lists and intellectual property? For some owners, it makes sense to transfer ownership of the entire company to maintain continuity and provide a clean break. Other owners might prefer to separate certain assets from the overall business for the transition, which can offer more flexibility and allow you to determine the best path forward based on the circumstances of both your business and your potential successors. Total Sale vs. Gradual TransitionOnce you’ve determined what you’re passing on, the next question is whether you want to do it all at once or over time. A total sale all at one time offers a clean break—allowing you to walk away and fully focus on the next chapter of your life without any ongoing responsibilities. This might be ideal if you’re ready to retire or want to avoid being tied to the business. However, a gradual transition, such as selling ownership over time or handing over control piece by piece, can help provide stability and continuity. It allows successors time to adjust to their new responsibilities and helps ensure that the business remains stable during the transition. A hybrid option could be to sell/transfer the full business or all assets at the same time, but stay on in an advisory capacity to support your successor as they navigate the early stages of leadership. Key Employee Buy-In? ESOP? Family Trust?How you structure the transition also matters greatly. Would selling to a key employee or a group of key employees make the most sense? This option is often attractive because it keeps the business in the hands of those most invested in its success. Alternatively, establishing an Employee Stock Ownership Plan (ESOP) allows all employees to gradually take ownership of the business, building a sense of shared responsibility and loyalty. A family trust, on the other hand, can help preserve the business for future generations, ensuring that family members maintain control and benefit from the business’s success. Each option comes with unique benefits and challenges, and it’s important to think about which aligns best with your vision for the future. Retaining an Advisory RoleFor many business owners, stepping away completely all at once can feel overwhelming or “too soon.” You’ve poured your heart and soul into this business, and the thought of cutting all ties can be difficult to face. If this sounds like you, consider whether retaining an advisory role might be the right option. Remaining involved as an advisor can offer you the best of both worlds—you get to step back from the daily responsibilities while still contributing to the company’s success. This role can be invaluable during a gradual transition, as it provides stability for the new leadership and peace of mind for you. The Importance of Business ValuationNo matter what path you choose, having an accurate valuation of your business is essential. A thorough valuation helps you understand the true worth of what you’re passing on, allowing you to make informed decisions and ensure fair value for yourself and any successors. This valuation process can also highlight areas where your business could be improved before the transition, helping you maximize its worth and set your successor up for success. The more clarity you have about the value of your business, the easier it will be to create a succession plan that aligns with your goals. Aligning with Your Goals and ValuesThe decisions you make about what you’re passing on should align with your personal goals and values. Are you singularly focused on maximizing the financial return from your business? Or is preserving your family’s legacy the most important factor? Do you want to give back to your employees who have helped the business grow over the years? Or do you want to make sure your family members are provided for above all else? There’s no one-size-fits-all approach, and every decision should reflect what you value most. Defining what you’re passing on is about more than just finances; it’s about shaping the future in a way that is meaningful to you. Creating a Customized Succession PlanUltimately, defining what you’re passing on is one of the key factors in crafting a succession plan that’s customized to fit your unique circumstances. Whether you’re selling the business outright, transitioning assets over time, establishing an ESOP, creating a family trust, or some combination of these options, the structure of your succession plan should reflect your vision for the future. A thoughtful, well-designed plan can help ensure that your business continues to thrive long after you’ve stepped away, benefiting your successors, employees, and community for years to come. At MSB Law, we understand the complexity of these decisions. Our values-driven approach ensures that your succession plan is crafted with care, aligning with your priorities and goals. Whether you’re ready to step away completely or prefer to remain involved in some capacity, our team can provide the guidance and support you need to make the best choices for your future. Contact us today to learn more about how we can help you define what you’re passing on and create a succession

Choosing your successor is often the most emotional and challenging aspect of successful succession planning. It’s not just about finding someone who has enough money or can run your business effectively—it’s also about identifying a person who understands the heart of what you’ve built, who can honor your values, and who has the capability to take your legacy to new heights. This decision is a big key to the future of everything you’ve worked so hard to create, making it critical to approach this step with thoughtfulness and intention. Our previous blog post covered five questions you should consider as you are making plans for your business’s succession. Now, let’s take a close look at question 1: “Who? – Choosing Your Successor.” 1. Passion and Alignment with Values   A successful succession plan begins with a successor who not only has the necessary business skills, but is also someone who has a genuine passion for the work. Passion fuels dedication and commitment, two traits that are non-negotiable when it comes to preserving and growing your legacy. Beyond that, does this person align with your values? A successor who shares your philosophy on leadership, ethics, company culture, and positive community impact will be more likely to sustain the vision you have set for your business. Take time to reflect on the core principles that matter most to you, and ensure your successor resonates with those ideals. 2. Capability and Skillset  While passion and alignment with values are essential, so too is the capacity to lead effectively. Ask yourself if your successor has the technical skills, business acumen, and strategic mindset to guide the company forward. Capability doesn’t just mean experience—it also involves adaptability, teachability, and the potential for growth. If your preferred candidate isn’t quite ready yet, but shows promise, consider mentorship opportunities that can bridge the gap. Think about the timeline for your transition and whether there’s room to develop their skillset in preparation for taking the reins. 3. Willingness to Take on the Responsibility   One of the often-overlooked parts of successful succession planning is making sure the person you’re considering genuinely wants the role. Stepping into leadership can be overwhelming, especially if they understand the full weight of responsibility. It’s crucial to have open, honest conversations with your potential successor(s) to ensure they are excited and ready to take on the responsibility. This is not just about capability but also about willingness—if they feel pressured into the role, it could lead to significant challenges down the road. 4. Relationship with Stakeholders   A successful transition is not just about the successor’s relationship with you; it’s also about their relationship with all your stakeholders including your employees, clients or customers, and the broader community. How well does your successor get along with key stakeholders? Are they respected in the community? Are they trusted by the people who matter most in the day-to-day running of your business? These relationships are the foundation upon which a successful future is built, so it’s important to choose someone who can foster strong and supportive connections. 5. Emotional Intelligence and Leadership Style   The way your successor leads matters. A great leader makes sound business decisions, while also inspiring others and navigating the human complexities of running an organization. Emotional intelligence (EQ)—the ability to empathize, communicate effectively, and respond with sensitivity—is a trait that can set a successor apart. Observe how they handle challenges, interact with others, and respond to conflict. The right successor should be able to carry your vision forward while also carving their own path, bringing both empathy and resilience to their role. 6. External vs. Internal Succession   Sometimes the best candidate is within your company—a family member, a long-standing employee, or even a co-founder. Other times, it might make more sense to look externally. Both approaches have their pros and cons. An internal candidate already knows the ins and outs of the company culture and operations, while an external candidate can bring fresh ideas and a new perspective. It’s essential to weigh these factors and decide which type of candidate will best serve your business’s long-term goals. Consider who will be most effective in guiding the company toward your vision, while maintaining the core of what you hold most dear. 7. Communicating Your Choice   Once you’ve chosen your successor, the next step is to communicate that decision effectively to all relevant parties. The way you announce this choice can have a significant impact on how it is received by employees, clients, and partners. Make sure your communication is transparent, respectful, and celebrates both your legacy and the future leadership. Introducing the successor gradually can also help ease anxieties and build trust, allowing everyone to adjust to the upcoming change. Choosing a successor is a deeply personal journey. You’re deciding who will carry forward your life’s work, and that requires both your head and your heart. By prioritizing factors like passion, capability, alignment with values, and the ability to build relationships, you can make a choice that ensures your business’s future is in good hands, and allows both your business and the community to experience the benefits.  Remember, it’s not about finding someone who will simply replicate what you’ve done—it’s about finding someone who will honor your legacy and take it to the next level. At MSB Law, we understand how important it is to make the right choice for your business’s future. Our values-driven approach to successful succession planning ensures you have the support and guidance you need every step of the way. Let us help you create a plan that respects your vision and sets your successor up for success. Contact MSB Law today to begin securing your legacy.