Succession Planning

Both Fortune 500 companies and local, family-owned enterprises share the same challenge of planning for the orderly succession of a business and its management team. Despite the plan’s structure, there are several key components to succession planning: What is the company’s value? In family business, what emotions and dynamics are involved? How strong is the management team? What are the tax ramifications of the transaction?

Succession planning requires a team of professionals, including CPAs, valuation specialists, financial advisers and attorneys. You should begin the day your business opens its doors, and you should always include it in any strategic planning initiative.

The Law Offices of James A. List, LLC offers advice on the following sucession planning topics:

Asset & Stock Sales

If your business isn’t traded on a public stock exchange, often you have to sell some or all of your assets, including equipment, customer lists or inventory.  With these types of sales, the purchaser creates a new company, and generally does not assume the seller’s liabilities. Publicly traded companies and some larger private businesses participate in a stock sale, stock swap or a merger, when ownership in an existing business transfers or exchanges between the parties.

The tax structure of the sale is critical. There is a significant difference between capital gains tax rates and ordinary income tax rates. The depreciation schedules (and the buyer’s ability to deduct this expense) varies for different types of purchased assets. A team of professionals is essential to negotiating and structuring your deals.

Employee Purchases
Family Gift and Step Transactions

Baltimore Office

11019 McCormick Road, Suite 400

Hunt Valley, Maryland 21031

Eastern Shore Office

5700 Coastal Highway, Suite 100

Ocean City, Maryland 21842