How Business Succession Planning Can Help Reduce The Risk Of A Partnership Dispute
No business owner wants to end up locked in a partnership dispute. A dispute within a partnership can cause serious damage to the business. Notably, transition periods are one of the highest risk times for partnership disputes. For this reason, every company should have a comprehensive business succession plan in place. In this blog post, our West Palm Beach partnership dispute attorneys provide an overview of business succession planning.
What is a Business Succession Plan?
A business succession plan is a comprehensive strategy for passing on leadership roles and ownership of the company. In effect, a succession plan makes sure that there are procedures in place should one or more of the business partners (or key leaders) suddenly leave the business. When crafted properly, a business succession plan will help to ensure that the partnership can transition smoothly to the stage.
As important as they are, most small and mid-sized businesses lack a succession plan. According to a report from SmallBusiness.com, nearly 6 in 10 American companies do not have a business succession plan. Failure to create a proper business succession plan can lead to a wide range of different problems, including increasing the risk of a partnership despite.
Know the Key Principles of Business Succession Planning for Partnerships
As every partnership is different, every business succession plan is unique. That being said, well-crafted succession plans tend to share some common characteristics. Here are four of the most important principles for business succession planning for a partnership:
- Formal: A business succession plan should be written and formalized. Even if the partners have a general agreement on what should happen, it can be difficult to execute on an informal or verbal succession plan.
- Systematic: Clarity matters. Disputes are far less likely to happen when everyone is on the same page. A systematic business succession plan is a workable business succession plan.
- Focused: A formulaic business succession plan is not good enough for your Florida partnership. Every business needs a succession plan that is tailored to its unique needs.
- Practical: Finally, it is crucial that your company’s business succession plan is practical. A business succession plan that does not properly account for the realities of the situation can cause serious problems down the road.
At the end of the day, succession planning is all about protection. You never know what the future will bring. By putting a comprehensive business succession plan in place, you and your business partners can go a long way towards reducing the risk of a difficult partnership dispute.
Consult With a Partnership Law Attorney in Florida Today
At Pike & Lustig, LLP, our Florida business lawyers have deep experience handling partnership disputes. If you have any questions about business succession planning and partnerships, we are here to help. Call us now for a fully confidential, no obligation review of your legal case. From our office locations in West Palm Beach, Miami, and Palm Beach Gardens, we provide commercial law services throughout Southeastern Florida.