Initially, before beginning to transfer a business from one generation to the next, the attorney will want to understand all the working aspects of the business. For example, he should review all important and relevant documentation relating to that business. First, the succession planner should review any ownership documents, including stock books, articles of incorporation, bylaws, and any other agreements relating to ownership and or voting rights.
Second, he should review any document relating to the history of the business, including financial statements, existing contracts (e.g. employment contracts). Third, the planner should review any mortgages or loans that encumber the business, as well as any other agreements or contracts that could lead to ownership problems during transition of the business to the next generation. Reviewing all of these documents will help the succession planner understand the structure of the business, and whether it will need a new structure for it to successfully pass to the next generation.
After these steps, the attorney should make sure to hold family meetings so he or she can better understand the family dynamics, and attempt to discern with the business owner the best business roles for the relevant family members. The attorney should assist the family with the new roles in the company, and explain these new positions, along with any authority (or lack thereof) as to business decisions. This is especially true where the parent business owner dies unexpectedly.
