Exiting your business

For some people their business is a separate entity that will continue after they retire or leave. For others it is so closely dependent upon their personal input that it will simply come to an end when they stop working. Either way, you need a carefully planned exit strategy that will enable you to optimise your position when the time comes.

Here are some possible scenarios:

Passing on your business to your children or other members of the family. You will need to be careful in your choice of successor, especially if some of your capital will remain tied up in the company, for example in shares. You will need to put in place the right mechanism to effect the transfer and make sure your plan is tax effective. It is important to consider how much control you are prepared to give up on retirement.

In some cases it will not be possible to retain control once you retire, though you may still have a degree of influence. If you are passing the business on to family members, do not overlook the fact that you can appoint them as directors and hand over the day-to-day running of the business while retaining control of the company through your shareholding.

Also you may wish to consider using trusts as a way to pass an interest in the company on to family members while continuing to exercise some control.

Selling your share in the business to your co-owners or partners. This might already have been considered and incorporated into your partnership or shareholders agreement. You will need to be able to place a value on your share in the business