Heselmeyer Zinda PLLC Addresses Business Succession Planning

Added: (Fri Jan 15 2010)

Pressbox (Press Release) - D. Scott Heselmeyer, a lawyer with the Texas-based business firm of Heselmeyer Zinda PLLC, with offices in Austin and Dallas, weighs in on issues of family business transfers – which can be problematic and laden with less-than-obvious complexities.

It’s an American ideal for millions of our citizens to this day – the concept of passing on a business to a succeeding generation. It doesn’t matter the genealogical configuration – be it father to son – uncle to nephew – aunt to niece – grandparents to grandkids – the idea of business succession seems like an obvious facet of the very practice of American business. “It’s at the core of the way we have long perceived our businesses,” asserts D. Scott Heselmeyer, a lawyer with the Texas-based firm Heselmeyer Zinda PLLC, with offices in Austin and Dallas, “Our businesses are often passed down.”

But doing it is not always so simple. “Sometimes it is difficult to transfer the family business in an efficient and cost-effective way,” Heselmeyer explains, “and sometimes there are intricacies that need to be considered.”

Planning has to address key issues of ownership, management, and taxes – or else the intended succession may fail to take root – like a delicate flower planted in rocky soil.

“Our firm often deals with complex particulars of business succession planning,” Heselmeyer says, “if these particulars aren’t adequately addressed, even a business that has thrived for generations can suddenly fail.”

While ownership may not entail an active effort to run the business, management invariably does. “Ownership and management are distinct issues,” says Heselmeyer, “It might be advisable in some cases to avoid equal distribution of the business’s assets among several children who have come of age, and to consider motivation as the prime factor in the succession planning, for example.” The most interested successor is often the best successor in passing down the enterprise. If a potential successor is only cursorily interested in taking over the business, earning the faith of clients and employees may become problematic – even in the short term.

Taxes are a third tenet of business succession that can easily be overlooked. These prior obligations can account for 20 to 50 percent of a business to be passed down. “Without the competent help of a professional advisor, such as a business lawyer, unpaid taxes can result in major liquidation of business assets or even the coerced acquisition of additional debt just to maintain an existing business,” Heselmeyer concludes.