October 2000 volume 4, issue 2 

Will your business succeed and will your retirement be secure when you step down? If you are over 55 years of age and an owner/manager of a private Canadian business, then there is a very good chance you don't have an answer to that question.

Recent surveys have shown that the majority of Canadian business owners have no succession plan in place, which means they are putting themselves, their business, their employees, and even their family's financial security at risk.

Proper succession planning is necessary and the time to start this plan is now.

Succession planning is a must for the owner/manager. A proper plan will cover all of the eventualities including retirement, illness, death, and even divorce. Obviously, there are a multitude of different variations to consider and the issues can often be complicated, but as we have seen on many occasions, the benefits of a carefully crafted succession plan are many.

First and foremost, your succession plan can ensure that what you want to have happen to your company, on your death, retirement, or on the eventual sale of the business, actually happens. Aside from the obvious benefit that a proper plan can save or defer income taxes, it can also ensure that:

• In the event of your death, there is a plan in place, and funds available, to ensure that your business is either carried on by close family members or key employees or, if necessary, sold in an orderly and profitable manner. Most importantly, provisions would also be made for the long-term financial security of your loved ones;
  
  
• If you are like many owner/managers and you eventually hope to transfer the owner ship of the business to your children or other close family members, a succession plan would address such critical issues as when you would give up control of your company, the security of your remaining investment in your business and, once again, your family's long-term financial security; and
  
  
• By planning now, key family members and loved ones can be apprised of your decisions, a process that goes a long way towards helping you and your family deal with and resolve these sensitive issues.

The partners at Wilkinson are uniquely qualified to help owner/managers deal with the problems of succession.

Our client base consists primarily of small to medium-sized businesses and we have a wealth of experience and expertise dealing with a wide variety of businesses and business owners. We strongly believe in maintaining a close relationship with our clients and as a result, are often very familiar with their needs, wants, and expectations providing us with the valuable insight needed to prepare a proper succession plan.

Additionally, all partners have access to The Wilkinson Tax Group, four partners who have worked with leading experts across Canada and have up-to-date knowledge on all of the income tax implications regarding the transfer of wealth to the next generation. And finally, any good succession plan will require the assistance of a team of professional advisors; lawyers, valuators, insurance agents, and investment advisors. At Wilkinson, we can work closely with your already trusted advisors or can recommend professionals to ensure that your plan succeeds.

Our goal is to help you develop a succession plan that will:

• describe in detail how and when you would be paid for your business;
• answer and resolve all of the critical income tax questions;
• maximize the transfer of wealth to your close family members;
• help you protect against the unforeseen such as a premature death, illness, disability, or divorce;
• build a solid foundation for your company's and your key employees' future.

Don’t put off until tomorrow what should be done today. Call your Wilkinson partner and let us help you develop a succession plan for your business.

Bob Robertson, CA is a Client Services Partner with Wilkinson & Company LLP. During the past ten years, he has designed many estate and succession plans for clients.