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How to transfer ownership of a family business

On Behalf of | Feb 23, 2021 | Business Law

There may come a time when you’re no longer interested in being an active part of the family business. For instance, you may be interested in retiring, starting a new business or getting out of a company that is losing money. Take a look at a few strategies that you can use to transfer ownership of your Georgia company.

How is the company structured?

If you ran the company as a sole proprietor, the company stops functioning when you step aside as its owner. However, it may be possible to sell key assets to family members, who may then use them to revive the company. If the organization operates as a partnership, LLC or corporation, it may be possible to sell your portion of the company to other owners. This is typically done per the terms of a buy-sell agreement.

Consider gifting the company to family members over time

You can make gifts of up to $15,000 per year to as many different people as you’d like without triggering a taxable event. Depending on the size of your business, making annual gifts may allow you to execute a long-term succession plan while also minimizing a future estate tax bill.

Put the company in a trust

Placing your company in a trust may provide for a smooth transfer of ownership when you decide that it’s time to step aside as its leader. It can also provide your firm with a sense of stability in the event that you die in an accident or succumb quickly to an illness. A business law attorney may provide more insight into why it might be beneficial to make such a decision.

Proper planning can make it easier to ensure that your company will stay in the family for generations to come. An attorney may be able to help you craft a succession plan or take other steps to help protect your assets.