Famous designer Giorgio Armani has outlined a succession plan aimed at preventing his fashion empire from being split up, the Merced Sun Star reports. After he dies, Armani says, three people who he names will be put in charge of a foundation that he created last year both as a succession tool and as a vehicle for charity investments.
Choosing a successor can be as easy as appointing a family member or assistant to take the owner’s place, Investopedia explains. “However, there may be several partners or family members from which the owner will have to choose, each with various strengths and weaknesses to be weighed and evaluated. Partners who do not need or want a successor may simply sell their portion of the business to their partners in a buy-sell agreement.”
Consider the role family businesses play in job creation: family companies are responsible for 60 percent of the jobs in America and nearly 80 percent of new jobs created, Michael Evans writes in Forbes. But uncertainty about whether junior members will have the aptitude and experience for running a company is the leading concern that family businesses have, Evans adds.
Succession planning isn’t easy, as Armani himself is learning. “Believe me, it is horrendous to decide what to leave to whom, if it is right or not right. Every five minutes, you are placed in front of a reality of a man to whom something could suddenly happen. This is true of everyone, but more so at 83,” Armani said.
At Rebecca W. Geyer & Associates, we know that owners of closely-held businesses have special needs.The problem –the owners are so busy developing their business, they don’t have time to address the legal issues needed to ensure their continued success. We advise clients on
- proper organizational structure
- the use of buy-sell arrangements
- corporate restructuring
- tax reduction
- succession planning
Typically, other professionals work as a team with our attorneys to design a complete plan. We work closely with business owners’ insurance agents, tax professionals, and investment advisor to design a complete succession plan.
Properly designed business succession plans can help prevent two kinds of splits: split-up of the business, and disputes among family members!