Rachier and Amollo Advocates

We are social:

LinkedIn 

Business Succession Planning

No company can survive without an able owner or manager at the helm. In the event of a key person’s sudden death, illness, or retirement, businesses are often left scrambling to find a suitable replacement. Large corporations and small businesses alike can avoid a tumultuous transition by establishing a succession plan with a knowledgeable advocate at Rachier & Amollo Advocates. Our business succession planning services include:  

  • • Addressing potential exit strategies
  • • Business restructuring
  • • Mergers, acquisitions or sales
  • • Recapitalization
  • • Advising clients on planning for the valuation of the business
  • • Transfer or disposition of intellectual property assets of the business
  • • Earn-outs

Rachier & Amollo Advocates also provides a full-service estate planning and administration practice that can facilitate any other estate planning needs of business professionals.

 

Without a Plan

 

If an owner or shareholder does not have a succession plan in place, his or her stake in the company is either passed on to relatives as part of the estate, absorbed by other shareholders, or a combination of the two. In family-owned businesses, this often leads to disputes between siblings and other relatives. Those more active in the day-to-day operations of the business may feel entitled to larger shares than others who are less involved. In larger corporations, employees and clients may leave the company for fear of instability. Additionally, without prior planning, remaining shareholders may not have sufficient resources needed to purchase the shares of the exiting or deceased shareholder. This can lead to a situation where a spouse or child of a deceased shareholder attains an ownership stake in the company which can result in disputes, stalling progress and possibly leading to a loss of assets. Furthermore, if the exiting shareholder had a management duty, her replacement may not be equipped to take over her role through such a delicate transition time.

 

With a Plan

 

An advocate with expertise in business and estate planning can help owners and shareholders put together a plan that facilitates a smooth transition. Plans are customarily created after employees, coworkers, shareholders and family members have been consulted and goals for the future of the company have been outlined. Succession planning can be tailor-made to fit any business model and should address the following issues:

  • • Keep the business or shares within the family. With a retention plan, a spouse, children, or other relatives can retain control of assets.
  • • Offer shareholders or vital employees a larger stake in the company. Interested parties stipulated in the plan will be granted the right of first refusal, or the ability to accept or reject the shares of the exiting or deceased owner before they are offered to individuals outside of the company. The price of the shares can be determined by a valuation mechanism agreed upon during succession plan negotiations. For example, a valuation mechanism may require that shares be offered at their prevailing market value, or require multiple professional business valuation appraisals
  • • Address issues related to your estate plan as well as minimization of potential estate taxes.
  • • Preserve “institutional memory” when you or other current managers are no longer running the show. For example, you can empower advisors to aid the transition team and ensure continuity, oversee day-to-day operations, provide provisions for heirs who are not directly involved in the business, and provide education and training to family members and key employees who will take over the company.
  • • Establish measures to ensure the business has enough cash flow to pay taxes or buy out a deceased owner’s share of the company.
  • • Implement a family employment plan with policies and procedures regarding when and how family members will be hired, who will supervise them, and how compensation will be determined.

Other arrangements can be made that would transfer the owner or executive’s interest into trusts to be paid out to family members. Assets may also be divided among employees or in other cases, it may be best to sell the company. With so many factors to consider, it is important that you consult an experienced business planning advocate who can understand all of the interests at stake and work with you to protect them. Contact Rachier & Amollo Advocates today to schedule a consultation.

Awards and Recognitions

GLOBAL LAW EXPERTS

Subscribe to our monthly newsletter and be on the know on what is happening at Rachier & Amollo Advocates

 

Our Company Profile

Click here to view our FIRM PROFILE

Trendy:
Previous Next
Nairobi, December 5th, 2012 At the Kenya Bankers SACCO, Lyla Latif was among the panelist at the session organized by the... [+] Read More
Nairobi, November 23rd and 24th, 2012 At the British Institute for Eastern Africa (BIEA), Lyla Latif made a presentation on “Financing... [+] Read More
Nakuru, December 7th, 2012 At the Milele Resort on behalf of the Legal aid clinic set up by KANCO/KELIN, Lyla Latif... [+] Read More
Genetically modified and regulatory framework Representing National Biosafety Authority in a matter involving Unilever Kenya against their... [+] Read More
To Tint or Not To Tint We challenged the decision by the Inspector General Police on the issue of tinting personal... [+] Read More
Pupilage We have successfully trained new members of the profession who joined us as pupils in the... [+] Read More
Oil and Gas June 23rd -July 4: The firm sponsored the Admin and Litigation partner to attend a training on... [+] Read More
Rachier & Amollo are 2015 Justice cup Champions Rachier & Amollo Advocates are the 2015 Justice cup Champions whose theme this year was... [+] Read More
Hybrid Energy Supply of East Africas Largest Salt Factory Krystalline Salt’s factory is supplied by 25% of solar energy in grid parallel and in diesel... [+] Read More

Rachier & Amollo Advocates,

Advocates, Commissioners for Oaths 

and Notaries Public

Mayfair Centre, 5th Floor - 

Ralph Bunche/Argwings Kodhek Road

P O Box  55645 – 00200 

Nairobi, Kenya

 

 

Tel: +254 20 2716012-6

Cell Phone: +254 - 722 204 778/  

+254 -733 616662 

Fax: +254-20- 2716017

Email: lawtechs@rachieradvs.co.ke