Business Succession

Business stakeholders reading plans.

We can help and the services we supply to do this can be found here.

Set out below are examples of what you need to consider when managing your affairs.

Things to consider:

Asset Protection

Provides cover for "Capital Purpose" debt in the event of the death or disability of a Business Principal or key person.

Identifying your needs:

  • Cash required to repay business debt such as; Business Loan, Mortgage, Overdraft, Lease Commitments or Proprietor Loans.
  • Identify each owners share of the commitments.
  • Is the liability joint or several.
  • Who is the person on whom the firm's success and profitability mainly depends?
  • If something happened to that person, would your firm have difficulty meeting it's commitments under the loan?

Shareholder or Director Loan:

  • Is the loan on call?
  • Could your company repay the loan today?
  • If there was a way to guarantee that the funds would be available on death/disablement to repay the loan and free the assets, would you want to know about it?

Revenue Protection

Provides cover for the loss of Revenue generated by a Key Person in the event of their death or disability.

A key person is:

  • The main revenue producer of the business (i.e. salesperson).
  • The "owner" of key intellectual capital.
  • The "name" behind the business (goodwill).
  • All employees or business principals that are essential to the continuing profitability of the business.

Who is the person in the firm that the success and profitability mainly depends?

What would be the effect on your business if this key person died or was disabled?

What cash is required to compensate for loss of revenue and replacement costs?

If there was a way to provide you with a cash cushion to offset loss of profits if he or she dies or becomes disabled, would you want to know about it?

Ownership Protection

Provides funding for Business Succession in the event of the death or disability of a business principal.

  • If something happened to your partner, would you want to buy his/her share of the business?
  • Do you have a Buy and Sell Agreement that gives you the right to buy?
  • How important is it to you to be able to buy that share and keep outsiders out of your business?
  • Have you sufficient cash in reserve to fund the transfer of a terminating owner's equity, due to death or disability, as a continuing owner?

If there was a way to purchase at an agreed price, and that the money was available when needed with no repayment, would you want to know about it?

SGA Financial Services can assist you with a tailored Business Succession Plan. If you would like a complimentary consultation, please contact the office on (03) 9813 3369 to make an appointment.

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