|By: Garrett J. Olexa|
- Is it important to you that your business survive if you can no longer work or after your death?
- Are you counting on the business as a means of supplementing your retirement nest egg or as a continued source of revenue?
- Can your family run the business without you?
- If a family member is capable of leading operations, has he or she been properly trained and given the necessary support, authority and resources to take control of the business?
- If a family member will be taking the reins, has the transfer of your ownership interest been properly addressed in your Will or Trust and company documents?
- How will the departing members’ interest be valued (e.g. by appraisal, some multiple of annual earnings, etc.)?
- What specific events will trigger the sale of a member’s interest (e.g. member voluntarily leaving, member retiring, disability or death of a member, etc.)?
- Is the purchase mandatory (as opposed to in the form of an option)?
- Where will the funding for the purchase come from (e.g. does the company have life insurance policies on the members to ensure funds to buy-out the decedent’s interest upon his or her death) or what finance terms will apply?