Why is it important?

You are the driving force and inspiration behind your business, so what will happen to it when you leave?


Most business owners want the business they’ve worked hard to establish to continue to thrive when they leave, whether it’s in the hands of a family member or a new owner.


Succession planning focuses on who will run your small business or take it over in the event of retirement or an unexpected event. A good succession plan is one that develops a clear vision for the future of your business and those involved in it.


A succession plan will secure the future of your business.


Buy-Sell Agreements

A buy-sell agreement provides the remaining owners with the right to buy out the interest of the departing owner on pre-arranged terms subject to a triggering event occurring. Trigger events may include retirement, resignation, and conviction of a criminal offence, one of the owners becoming bankrupt, or death and disability.


Funding the Plan

Succession plans should detail strategies to finance the purchase of the departing owners’ interests. Potential financing mechanisms include bank finance, vendor terms, the sale of business and/or person assets, or the location of a third-party buyer. Insurance monies may also help to buy the departing owner’s share of the business, keep the business running, and cover loss of profitability due to the loss of a partner or owner.


Other considerations

Business succession planning is a highly complex issue and professional advice needs to be sought from a financial planner, solicitor and accountant. Consideration should be given to capital gains tax minimization strategies, an appropriate valuation methodology, whether or not the funding mechanism is adequate and ability to transfer insurance to the new owners.


Key Person Risk

All businesses have a small number of key people who provide the ideas, initiative and talent that generate the value of the business. The sudden loss of a key person can be disastrous for profits and business value. Businesses should have appropriate key person insurance to protect against calamity.



Finance Brokers

The Finance Brokers Association of Australia (FBAA) is a national association representing finance and mortgage loan writers throughout Australia.

AMP Financial Planner

AMP Accredited Financial Planners have been helping Australians by delivering the right balance of security and performance for over 160 years.

Tax Practitioners Board

The Tax Practitioners Board provides an overview of our continuing professional education requirements for tax agents, BAS agents and tax (financial) advisers

Australian Finance Group

AFG is now one of the largest providers of mortgage broking services in the country, offering more than 1,400 financial products from Australia’s leading lenders.

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