Have you got a family business you love but want to have some peace of mind for when it’s time to step away? You aren’t alone as more and more Australians start their own business, we are hearing about more people worried they will have to sell or close down their business they have worked so hard for.
But this anxiety doesn’t have to plague you, transferring your family business to the next generation can be a very straightforward and hassle-free experience!
Who will take over the business?
This is an important question everyone asks themselves, and there are a few things to keep in mind when considering this. Skills should always be at the top of your list when you rattle through your list of candidates – you may have a great affinity to help out your daughter, but your son’s best friend may be better skilled for the position. Make sure you take the time to find the ideal candidate, hold a panel, a series of interviews, whatever will give you the best insight into the perfect candidate!
What’s the steps for handing over the business?
There are a number of steps if you are transferring to a family member and you will no longer be a part of the business and these may include:
- Transfer business name or cancel your business name
- Cancel tax registrations such as GST
- Lodge all required tax returns
- Pay outstanding bills, activity statements etc.
- Make GST adjustments on your final activity statements
- Transfer any other assets such as domain names or web domain registrations
- Transfer business records, customer records and employee records
- Cancel your ABN after you have met all of your obligations for lodgement, reporting and payments
Start planning now!
A succession/exit plan is integral to a smooth transition for you and the new business owner. When you develop this plan, remember:
- Will you transfer both ownership and management?
- Are you going to review the plan regularly?
- Are you going to include direct family members in the business? What roles are they going to play?
- Is training or mentoring required on your part for your successor?
A terrific guide issued by the Australian Government on what steps are best can be found HERE