“I’m delighted that Saffery is sponsoring the Business Leader of the Year Award. As a firm, our purpose is to support opportunity and enable success, working with entrepreneurial business owners across a variety of sectors. Being able to celebrate the achievements of Highland business leaders is something I feel passionate about, as their success can create value across the economy. I wish all those who enter the best of luck!” – Hilary Clelland, Partner.
More on Saffery below.
Business succession planning
Deciding to leave a business can be as difficult as starting or buying a new one. If you’re looking to exit your business, what are your options?
Passing on your business to the next generation
For family-owned companies, the preferable option could be to pass the company’s shares to the next generation to continue the family’s legacy.
However, sometimes this is not practical. For example, adult children may not wish to give up their existing careers to take over the family company, or they don’t have the right experience to take over as the business owner.
Other options are, in brief:
A trade sale
A trade sale of a company refers to the sale of a business to another company in the same industry or a related sector. It typically involves the transfer of ownership and assets, providing the selling company with an exit strategy while allowing the acquiring company to expand its market presence or enhance its capabilities.
You could trade sale the company’s shares to a third-party purchaser or, possibly, to a private equity house. A trade sale will often mean that the owner can make a clean break and completely step away from the business.
A management buyout
A management buyout (MBO) is when the existing management team purchases the business from its current owners. In an MBO, the management team takes control and ownership of the company to run and grow it independently.
An Employee Ownership Trust
An Employee Ownership Trust (EOT) is an alternative legal structure that is gaining popularity, where a trust holds shares of the business on behalf of its employees.
This involves a sale of a controlling interest in the company to an EOT for an arm’s length price.
You can find out more about each of these options and the tax treatment in our full article: Business Succession Planning – A Guide (saffery.com)