Business succession planning in Mississauga
A succession plan answers what happens to the business if an owner dies, leaves or cannot work, and whether the money exists to do it. An agreement that names the outcome without funding it is a document, not a plan.
- The agreement
- The funding
- Key person cover
- The continuity plan
The instruments a plan is built from
Who ends up owning it
What the shareholders' agreement currently says, and what actually happens under it. For many owners those are two different answers.
Funding the buy-sell
Whether the remaining owners could buy the departing share, and where that money comes from. This is the part agreements most often leave open.
Key person cover
What the business loses if the person who holds the relationships, the licence or the technical knowledge is not there, and what it costs to carry on while that is replaced.
A continuity plan the bank will accept
Lenders and partners ask what happens if the owner is gone. Having the answer written down, funded and current is the difference between a question and a problem.
Owners who get asked what happens if they are gone
- Owners with a partner and no funded agreement
- Family businesses where the next generation is assumed rather than planned
- Companies whose lending depends on one person
- Owners whose personal estate and business estate have never been looked at together
About agreements, funding and the bank
We have a shareholders' agreement. Is that enough?
It depends whether it is funded. An agreement that says the remaining owners will buy the departing share is only as good as their ability to pay for it at the moment it is triggered. That funding question is the work.
Does this affect my personal estate?
Usually yes, and often as the largest item. For most owners the business is the biggest asset in the estate, so succession and estate planning are the same conversation rather than two.
Do you work with our accountant and lawyer?
Yes, and preferably. The valuation, the agreement and the tax work belong with them. The planning is making sure the pieces agree and that the outcome is funded.
Ehsan Khandaker is a licensed financial and estate planner, CLU and CHS. He is not a lawyer and does not draft documents. This page is general information about Ontario rules, not guidance about your own situation, and a will is drawn up by a lawyer.
Bring the shareholders' agreement, if there is one. The gaps are usually in what it does not say.