Business owners starting to think about retirement often consider gifting the company to family members or finding an outside buyer, however, many overlook another appealing option — selling the company to key employees through an employee stock ownership plan (ESOP).
If you own a thriving business, sooner or later you're likely either to sell it, hand it to family members or take it public. Whether you're just starting out or thinking about retiring in the next few years, you need to consider the best steps to mitigate tax burdens for yourself and your successor.
Few family business survive into the second generation and even fewer make it into the third generation of a family. Family business owners should start planning at least five years in advance to help ensure a successful transition.
The time to be sure that your company is prepared for a sale is well before the transaction occurs. Having an exit strategy is vital both in terms of continuity of the business and in terms of your personal financial and retirement planning.
The foregoing information is provided as a courtesy to our clients and friends of City National Bank (CNB) for their consideration. Unless otherwise stated, opinions expressed are those of the respective authors and not necessarily those of CNB. The information is provided without warranty and no recommendation or endorsement by CNB is intended or should be inferred unless specifically stated.
City National Bank is a subsidiary of Royal Bank of Canada
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