Succession planning options
Background: The owners of an established veterinary practice required advice regarding succession planning. The shareholders had started to think about their exit strategy and although they had not ruled out a sale to a corporate at a future date, they were keen for the practice to remain independent in the medium term as they had some key employees who they wanted to make shareholders.
How we helped: We provided practical advice which included:
- Valuation of the practice
- Consideration of affordability for the new shareholders (key employees)
- Discussions around funding
- Capital gains tax advice for the existing shareholders
- Advice regarding an anti-embarrassment clause (this clause ‘makes fair’ any consideration should there be a sale to a corporate within a certain time frame post sale to the new shareholders)
- Liaising with the solicitors advising on the legal agreements including an updated shareholders agreement
- Tax efficient remuneration planning to include the new shareholders
The outcome: The existing shareholders were able to bring new owners into the business, realising some cash, but having left their future options open as regards a corporate sale with some protection over the goodwill value they have sold to the new shareholders.