WARNING FOR BUSINESS OWNERS

Business owners across the Black Country have been urged to make reviewing their succession planning strategy akey priority in 2023 –orrisk having to rely on potentially unsuitable rules of which they areunaware.

Planning for any futurechanges in the ownership or management within the company may not have been on the immediate agenda for many in the first quarter of the new year

However,Paul Hunt –who heads the business succession planning team at Brierley Hill law firm Higgs LLP –has urged businesses to act swiftly,regardless of whether thereare any imminent changes in the pipeline.

He said: “Wetotally understand that, occupied with the task of building and operating asuccessful business, it is not always easy to find the time and headspace to step back to review the structureofthe business you own or aremanaging and plan for the future. Failing to deal with succession planning, however,can create commercial uncertainty and unwanted personal difficulties in years to come.

“Business aren’tstarting with ablank sheet of paper.Therewill be acurrent or default position whichwill apply for key events, including ownership changes. In many cases, owners of businesses will not be awarewhat that position is and it may not be what they would expect or want.

“For example, every company has its own Articles of Association, which contain important governance rules. That may be adocument created on incorporation which shareholders and directors have never properly considered. In our experience, business owners are rarely satisfied with the position we find. By understanding that, we have the opportunity to create something which works for them. It’svital that all companies areawareofthe documents and rules which apply and, if necessary,amend them to reflect everyone’s objectives and plans.”

Higgs’ succession planning service guides business owners through the process and may result in revised structures or an updated set of documents –including Articles of Association, Shareholders’ Agreements and Cross-Option Agreements –being finalised to shape the operation and futuredirection of ownership.