Overview
A business will is a critical legal document that outlines the future of your company in the event of your incapacitation or death, ensuring a smooth transition and protecting your legacy. It serves as a comprehensive guide for succession, detailing how ownership will be transferred, management responsibilities will be assigned, and assets will be distributed.
This essential planning tool helps prevent disputes, maintain business continuity, and secure the financial well-being of your family and employees.
- Purpose: A business will clearly defines the succession process, ensuring your company continues to operate according to your wishes and protecting its long-term viability.
- Benefits: Implementing a business will provides peace of mind, safeguards your financial interests, and can help prevent future disputes among stakeholders.
- Key Elements: This document typically includes provisions for ownership transfer, management roles, and the valuation and distribution of business assets.
Why KWB Recommends a Business Will for Your Succession Plan
When it comes to Estate Planning for Canadian’s there is no document more important to the successful distribution of assets than the Will. Â
TO HAVE OR NOT TO HAVE…THAT IS THE QUESTIONÂ
Most business owners would agree that the best opportunity for success comes with a well built and implemented business plan. But what happens if the business plan is interrupted by a triggering event such as a death, a major illness, divorce, bankruptcy, or a partnership dispute? How drastically would the business value be eroded?
The completion of the Business Will (a.k.a. the Unanimous Shareholder Agreement or USA) offers many benefits, not the least of which is protecting the value of the business for all shareholders. It is an essential document to reduce your exposure to litigation, and unnecessary taxes. However, creating a USA can be a difficult project to complete because it requires the parties to outline the process that will be followed in the event of a triggering event; and must be agreed to by all shareholders.
Whether your company is in start-up, growth, or transition to new owners, such as children, employees or a third party, you should consider completing or reviewing your USA. Significant succession and estate planning opportunities have been missed when Shareholder Agreements are not updated.
This article was provided by Brad Arsenault of Clark&Arsenault – The Business Succession Advisory. Brad has over twenty years experience working with Insurance and Investment Advisors throughout Western Canada. He can be reached at Brad@ClarkandArsenault.com or click here to  visit his website