Haik Chilingaryan, Strategic Planning For Business Owners

What Is Included In Business Succession Planning?

A business owner needs to consider various strategies in order to prepare for the expected and unexpected legal challenges. To do so, the business owner should generally form a separate entity, such as a corporation. Next, whether the business is owned by one person or multiple partners, every business owner must consider planning for an exit strategy. Moreover, the business owner must understand the effect of certain provisions in the contracts he has entered into or those that were entered into on his behalf, including by agents. Furthermore, the business owner must ensure that the scope of an agency relationship, if any, is specifically defined.

Why Does A Business Owner Need Advance Planning?

1. The Status of the Business

If a business owner does not form and operate under a valid legal entity, a number of issues may arise. For tax purposes, the business owner may end up paying significantly higher taxes if certain types of entities are not properly formed. For example, it’s sometimes more advantageous to pay taxes as a shareholder of a corporation rather than as an individual operating under a sole proprietorship.

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