Corporate and Business Planning Services
We assist business owner clients in the transfer of business management and ownership efficiently. We provide general corporate, tax, estate planning, employee benefits planning, mergers and acquisitions and other legal services. Kotz Sangster Wysocki P.C.'s lawyers are skilled transactional attorneys, as well as experienced business advisors and counselors.
Many options, including complete ownership transfer of the business within the family, outright sale to a third party, or options in between are reviewed and coordinated. Typically, shareholders or closely held corporations, partnerships and family businesses alike, recover their investment from one of the following sources:
- The sale of the business to a financial or strategic buyer
- The transition of the business to a selected management team
- The transition of the business to a family member
- An orderly liquidation of the assets
Depending on the nature and size of the business, financial buyers may be difficult to attract and a strategic partner may be difficult to locate. While an orderly liquidation of a business allows the owner to obtain fair value for any investment in machinery and equipment, it often does not provide the business owner with fair value of its goodwill and intangible worth. Therefore, it is important for a business owner to assess his succession options, develop a succession plan and successfully implement the succession plan.
The object of any succession plan is to maximize the economic and intrinsic value for all invoved. This involves developing tax efficient strategies for transferring ownership, recognizing competing interests among potential buyers (including family members at times), assessing the advantages and disadvantages of sale as compared with retention, minimizing the impact of a transition on key employees and, most importantly, assuring harmonious long-term family relationships when the transfers of family businesses are involved.
The business succession plan typically includes:
- Extensive interviews with owners and managers to ascertain the strengths and weaknesses of the business as a going concern.
- With respect to family businesses, extensive interviews with the senior generation to understand their economic and personal obectives, and in appropriate cases, interviews with members of the younger generation to understand their economic and personal objectives.
- Analysis of whether it makes economic sense to preserve ownership or management (or both) in whole or in part with current owners or managers or whether the ultimate goal should be a complete third party sale.
- Assessment of various means of transferring ownership as discussed above.
- Assessment of the strength of current management and the potential impact of the death or disability of management, whether independent or family on the stabiilty of the business during transition or sale.
- Determining whether some form of continued control, or arrangement for resumption of control, should be retained by the senior generation after the transfer is complete.
- Developing means of transferring wealth to younger generation family members who are not interested in, or not qualified for, continuing in the business.
Representative Transactions
We acted as lead counsel for the second generation of a family-owned and operatied $40 million Tier-1 automotive supplier. We assisted in the smooth transition of the business from the founding owners to their children, with an emphasis on one child who will manage the company and the other children acting as advisors.
We acted as lead counsel with respect to a Tier-1 steel automotive supplier for which we structured a comprehensive succession plan whereby a management team puchased approximately 25% of the business with the remaining ownership owned by relatives of the company's founders. The remaining majority interest of the business was tranisitioned to the founder's children who worked with the management team in a more limited role.
We assited a closely held Tier-1 aerospace supplier in the sale of business to a strategic buyer.
We have presented a series of "power lunches" for the members of a large organization of construction companies in Michigan discussing all of the relevant aspects of a business succession plan and reasons why a company should have an orderly transition plan in place
