F.53 Business succession planning Flashcards

The process of preparing for the transfer of business ownership, leadership, and management in the event of retirement, disability, or death of an owner.

A legally binding agreement outlining how a business owner’s share will be transferred upon a triggering event, such as death, disability, or retirement.

A type of buy-sell agreement where co-owners agree to purchase a departing owner’s interest in the business.

A buy-sell agreement in which the business itself purchases the interest of a departing owner, rather than the co-owners.

A life or disability insurance policy a business takes out on an essential employee or owner to help offset financial loss due to their absence.

The process of transferring business ownership and leadership to family members, often requiring estate planning and management training.

Approaches to determine a business’s worth for succession planning, including asset-based, income-based, and market-based valuation methods.

A retirement plan allowing employees to acquire ownership interest in the company, often used as a business succession strategy.

A business succession strategy in which ownership is transferred to an external buyer, such as a competitor, private equity firm, or investor.

A strategy ensuring a business can continue operating smoothly during a leadership transition or unexpected disruption.