How We Help You
We specialize in serving the specific needs of wealth creators and entrepreneurs as well as their closely held businesses, prior to, during, and after a liquidity event.
We assist entrepreneurs and business executives in selling their businesses, advising on pre-sale planning, business transition, and post-transaction planning.
We focus on tax savings, cash flow strategies, estate planning and risk management - before, during, and after the sale of a business.
With our client-first fiduciary approach, you will receive tailored, transparent, and timely advice.
Considerations When Selling Your Business
- Determine if a sale meets your cash flow needs
- Prepare the business for sale
- Start tax planning early
- Conduct safe cybersecurity practices
- Consider gifting strategies
- Conduct dynastic planning
- Protect you and your family from creditors and predators
- Author a family mission statement
- Educate your family
- Examine titling of all assets
See more on these important aspects below.
Considerations When Selling Your Business
1. Determine If A Sale Meets Your Cash Flow Needs. Before concluding that a sale will satisfy your future cash flow needs, take the time to identify your anticipated needs, conduct long-term cash flow analyses, and then decide if you’re ready to sell.
2. Prepare The Business For Sale. Do your due diligence: make sure your books are in order, implement good internal control measures, and ensure all business paid expenses are in fact for the business rather than personal. Your buyer will examine to see if this is done so it is better to be ready before they start their due diligence.
3. Start Tax Planning Early. Depending on how your company is structured (LLC, C-Corp., S-Corp.) when it is sold, tax implications could defer depending in what you reside. Meet with a tax expert early on in the process to ensure the corporate structure is set up to be tax advantageous and determine if a change of residency is warranted.
4. Conduct Safe Cybersecurity Practices. Educate yourself and your family on safe cybersecurity practices including password protection and proper use of social media. Be very cautious about what you share and with whom.
5. Consider Gifting Strategies. The gift of ownership in a closely held business offers a favorable valuation opportunity where an owner can maximize annual gift tax exemptions and use of their lifetime exemption. Talk to your tax adviser to determine suitability.
6. Conduct Dynastic Planning. Outline how much money you want your children to receive, at what ages, and under what circumstances. With larger estates, consider using trusts to benefit your children and more remote descendants so they will not be taxed on the money remaining in trust at their deaths.
7. Protect You And Your Family From Creditors And Predators. You just sold your company. That means you and your family are now targets. Structure your assets to ensure a layer of protection from creditors by placing them in asset protection vehicles such as irrevocable trusts, limited partnerships or limited liability companies. With the average divorce rate at 50%, these vehicles may be structured so your wealth stays within the family bloodline.
8. Author A Family Mission Statement. Successful planning starts with defining your family mission statement. This is critical for articulating the family values the wealth creator would like disseminated to the next generation and beyond. Plan for yourself, and your family, so they understand how the wealth should be used and to what purpose.
9. Educate Your Family. Most entrepreneurs want to assist family and friends, however you need to be careful of creating a sense of entitlement. Education for you and your family members is critically important. Entrepreneurs need to set proper expectations and also put in place the proper vehicles where family and friends cannot access the wealth inappropriately.
10. Examine Titling Of All Assets. An estate planning attorney can help you properly title and transfer assets into the proper trusts. If assets are not titled properly, no amount of estate planning in the world will be enough to protect your assets for future generations.
Redmount Capital Partners, LLC does not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.