Welcome:

A. Welcome

B. FAQ's

C. IGS Services

 

 

 

Site Map

 

 

 

 

FAQ's about Business Succession Planning

 

What is a Business Succession Plan?

Complete Succession defines a "Business Succession Plan" as:

  • a documented

  • commercial, financial, management and legal strategy designed to enable

  • the orderly change of ownership or control of a Business (or part of the Equity in a Business)

  • upon the Retirement or occurrence of an Insured Event with respect to a Proprietor of the Business.

 

What is the Purpose of a Business Succession Plan?

The purpose of a Business Succession Plan is to pre-agree a strategy that will enable the Business and its Proprietors to deal with the exit of a Business Proprietor upon:

Usually, the Business Succession Plan is a product of asking the right questions and coming up with answers that meet the needs of the Business and its Proprietors.

 

What Exit Events Does a Complete Succession Plan Deal With?

In any Business, there are a number of disruptive or catastrophic events that could require or result in the exit or departure of a Proprietor from the Business in the future.

The most important of these Exit (or Departure) Events are:

 

What Questions Would We Have to Ask if an Exit Event Occurred?

A lot of difficult questions will come up if one of these events happens.

The questions can be very different, depending on whether:

It helps to have thought about these questions in advance, and to have some pre-agreed answers that are acceptable to all of the Proprietors.

 

What "Jobs" Can a Business Succession Plan Do?

Click here for an overview of what "jobs" a Business Succession Plan can do.

 

What Type of Business Needs a Succession Plan?

The Complete Succession Website is designed primarily for two types of Business or Small to Medium Enterprise ("SME"):

  • Multiple Proprietor Businesses; and

  • Sole Proprietors and Family Businesses.

 

Is This Website Suited to Multiple Proprietor Businesses?

The Complete Succession Website is most suited to Businesses with Multiple Proprietors or Owners.

This is because there is an identifiable Purchaser who has a commercial interest in acquiring your Equity in the Business (i.e., the other Proprietors).

Equally, if one of the other Proprietors departs first, you will normally have a commercial interest in acquiring their Equity.

 

Is This Website Suited to Sole Proprietors and Family Businesses?

In most cases, the Strategies discussed on the website can be adjusted to suit the needs of Sole Proprietors and Family Businesses.

However, in these cases, there is the added challenge of identifying or finding a Purchaser or new Owner.

Sometimes the new Owner might be a Family Member.

Other times, the current Owner might wish to sell the Business to a non-Family Member.

 

What is a "Complete Succession Plan"?

When a Business Succession Plan deals with both Retirement and Insurable Events, IGS describes it as a "Complete Succession Plan".

Business Succession Agreement

IGS describes a legal agreement that documents a Complete Succession Plan as a "Business Succession Agreement" or a "Complete Succession Agreement".

 

How is a "Simple Succession Plan" Different from a "Complete Succession Plan"?

"Simple Succession Plan"

When a Business Succession Plan deals solely with the sale of a Proprietor's Equity in the Business in the case of an Insured Event, IGS describes it as a "Simple Succession Plan".

Buy/Sell Agreement

A legal agreement that documents a Simple Succession Plan is often called a "Buy/Sell Agreement".

The scope of a "Buy/Sell Agreement" is usually much narrower than a "Business Succession Agreement" or a "Complete Succession Agreement".

Traditional Buy/Sell Agreements deal only with Death or Disability.

They do not usually deal with Trauma, Retirement or other Uninsurable Events.

Alternatively, documented strategies for these Events involve additional Legal Fees.

 

What is a "One Page" Succession Plan?

The essence of the Complete Succession approach is a "One Page Succession Plan".

When this approach is applied to Insured Events, the Strategy is called a "One Page, One Policy Succession Plan".

Case Study

Click here to see an example of a "One Page, One Policy Succession Plan" for Insured Events.

One Page Summary of Strategy

There is a One Page Summary of this Succession Planning Case Study here.

Other Publications and Documents

There are many similar One Page Summaries under the heading "Publications and Documents" here.

 

What is a "One Page, One Policy" Succession Plan?

IGS is able to document a Complete Succession Plan for Insurable Events, so that all of the Cover required by a Proprietor is held on One Policy.

This strategy is called a "One Page, One Policy Succession Plan".

One Page Summary

Click here to see an example of a "One Page, One Policy Succession Plan" for Insured Events.

Alternative to Multiple Policy Approach

The One Policy Strategy is an alternative to the traditional Multiple Policy approach.

 

What are the Benefits of Certainty?

If you have a Business Succession Plan, you will gain a level of certainty with respect to how a disruptive or catastrophic Exit Event will be dealt with.

This certainty benefits all of the Proprietors, as well as the Business itself.

It avoids damage to the Business and its Proprietors if the event occurs.

 

What Happens if You Don't Have a Succession Plan?

Unfortunately, many Businesses are reluctant to think through the issues in advance.

They are concerned that the issues can be complex and sensitive.

Often, the Advisers to the Business don't have the temperament, skills or experience to time- and cost-effectively shepherd the Business towards a completed Succession Plan.

Fear of Complexity and Cost

The fear of complexity and cost is the one major reason why most Businesses never complete or update their Succession Plan.

Unfortunately, this means that the problems that a Succession Plan is designed to manage or avoid could blow up and end up costing significantly more to remedy.

The Cost of Not Having a Succession Plan

Litigation about just one issue like the valuation of the Business could cost between $60,000 and $100,000, if not more.

The dispute and cost can seriously damage the Business and its financial viability at the very time it is trying to recover from the loss of a Key Person.

Avoiding Litigation Lawyers

It is hard enough for Small Business to make a decent return on investment, without making donations to Litigation Lawyers!

Many of the Advisers and Clients who use IGS' Services do so, because they have seen Businesses collapse under the pressure of disputes or costs.

 

Does IGS Charge Fixed Legal Fees?

IGS charges Fixed Legal Fees for all Agreements and Services.

The Fixed Fee charged by IGS depends on the choice of Agreement or Service.

Click here to see the current Fees for all Agreements and Services.

These Fees apply subject to the Legal Fee Policy.

 

What is the Aim of the "Complete Succession" Website?

The aim of this website is to help you understand, design and implement your Succession Plan.

Efficiently and cost-effectively.

 

What is the Complete Succession Approach?

While the web site is comprehensive, it is designed to deal with important (and sometimes complicated) issues in a logical, common sense and commercial manner that is relatively easy to read and understand.

Getting the Right "Jobs" Done

The Complete Succession web site sets outs a methodology that focuses on the "jobs" a Succession Plan can do.

It takes into account the legal and tax issues.

Getting Your "Jobs" Done

The Complete Succession web site is not a substitute for Client-specific legal or tax advice.

However, it is designed to help you understand the issues, so that you can give clear and relevant instructions.

Free 20 Minute Teleconference

If you are not the type of person who likes reading (and you have got this far on the page!), please call to arrange a Free 20 Minute Teleconference.

 

How Do I Find My Way Around the Website? (Site Map)

Click here to see a Site Map of the Complete Succession Website.

The grey Menu Bar (under the logo at the top of any page on this site) sets out the Headings of the main subject matter of the website.

Each page under a Heading contains a Menu Bar for that subject matter in the left-hand column.

 

What Strategic and Commercial Material is On the Website?

The strategic and commercial material explains the issues from the point of view of the Business and its Proprietors.

Just click on the heading "Business Succession Planning" in the grey menu bar .

 

What Technical, Tax and Legal Material is On the Website?

The technical, tax and legal material identifies the many traps and helps understand the "Toolkit" by which they can be avoided.

No matter how complicated the strategic and commercial issues might seem, the tax and legal issues are worse.

IGS Systems and Documentation

The IGS Systems and Documentation are designed to avoid the traps, so that you (and your Adviser) don't have to worry about them.

Focus on the "Deal"

This allows you to focus on the strategic and commercial issues, i.e., the "Deal" between you and your fellow Proprietors.

 

Does IGS Provide Adviser Updates?

See here for regular updates about Succession Planning practices and the Complete Succession web site.

4 June, 2014 Adviser Alert:

Adverse SMSF Specific Advice re Super Buy/Sell Cover and Agreement

On 12 March, 2014, the ATO issued a private SMSF Specific Advice which effectively concludes that the practice known as “Super Buy/Sell” contravenes the Sole Purpose Test under section 62 of the Superannuation Industry (Supervision) Act.

IGS has always expressed concerns about this practice:

Click here to read more about the ATO Advice.

 

Does IGS Prefer a Team Approach?

Ultimately, it's a lot easier to design a Succession Plan if we work as a team.

The Complete Succession Strategy is a system and methodology that is designed to get everybody on the same page. Preferably "One Page".

Time- and Cost-Efficient

Ultimately, the Complete Succession Strategy takes less time. And it's cheaper!

 

What Do People Say About Complete Succession? (Feedback)

Client (Majority Shareholder)

This agreement is long overdue and is a good first step for the four of us…

You have made this exercise very easy for us, I wish we had been referred to you much earlier.

Client (Managing Director of Third Generation Family Business)

Many thanks for our Draft Succession Plan which I read with pleasure.

Congratulations on producing this excellent document which very successfully distils the jumbled thoughts and concerns expressed in the meeting into a few much more manageable questions.

I guess that's why you are an expert in this field.

I believe that you have correctly ascertained the mood of the meeting and documented it accordingly.

Client (Chief Financial Officer)

Good morning Ian,

Thanks for your informative presentation today.

We have achieved more in an hour than I have been able to progress in 9 years.

Adviser

Just wanted to let you know how happy I was with the way you handled yesterday & perhaps, more importantly, you should know that (the clients) were extremely impressed & satisfied with the way it went. I think the term they used was "that bloke knows his shit".

Click here for more feedback.

 

Succession Planning Glossary

See the Glossary for more terms used in Succession Planning and the Complete Succession web site.

 

 

Index A: Welcome to Complete Succession!

See here for the Complete Succession Home Page.

 

Index C: IGS Business Succession Planning Services

See here for more FAQ's about Succession Planning.

 

 

Important Notice

The information and opinions on this web site are not intended to be acted or relied on by any Business or Adviser, except on the terms of a formal fee-for-service Lawyer and Client relationship with IGS pursuant to which IGS:

  • identifies the specific needs of the Client; and

  • advises with respect to those needs.

 

Limitation of Liability under Professional Standards Legislation

Liability is limited by a scheme approved under Professional Standards Legislation.

 

Copyright: Ian Gray Solicitor

 

 

Adviser Support System

IGS offers different ways to work together, depending on how actively an Adviser wants to promote Business Succession Planning and Business Insurance.

If you expect to have more than one Business Succession client a year, you might benefit from acquiring a Licence to use the IGS Adviser Support System.

A Licence can assist you and reduce the cost of your Client's Succession Plan.

The main benefits are free Client Meetings and Teleconferences in most capital cities, as well as a discount of $990 with respect to a Complete Succession Agreement or Business Insurance Trust Agreement.

Find out more

 

 

Current Marketing Schedule

Current Marketing Schedule

Ian Gray travels to most capital cities regularly throughout the year and is available for Meetings.

Please click here to see his availability in Brisbane, Sydney, Melbourne, Adelaide and Perth.

Please contact us to arrange an appointment or teleconference.