Jonathan Morris
Business Wealth

Handing your business over to the next generation is difficult and risky, both for the business and for personal relationships. We will help you to navigate and minimise those risks, and protect your legacy.

I want to put in place succession planning for my business

Below are some examples of the opportunities and challenges we respond to on behalf of business and wealth owners, their families and their other advisers.

How do I prevent my business creating family disputes after my death?

A plan to pass on a business but involve the family in key decisions

Our client wanted to pass control of the family business to two of her children – but make sure the wider family benefited from the profits and were involved in key decisions, such as a sale of the business or major new investments.

We worked with her to amend the articles and share classes, to adapt the control of the company.  We also advised on the creation of a family constitution. This document set out who would run the business, when and how they would canvass the family’s opinion on business decisions, and how family members – those working in the business and those not - would benefit from the profits.

Selling the family business may be the best way to provide for your family

Our client had built up a substantial business but knew that none of his heirs would want to run it after his death. We advised him from a corporate and tax perspective, on the sale of the business while he was still in charge, so he could maximise the sale price.

Then we helped him put in place an estate plan that would provide for his family both during his lifetime, and after his death in the long term.

I have many different business interests. I am worried about what would happen to them on my death.

A structure to manage a web of property interests

Our property developer client had acquired many holdings and interests.  Those interests were held within a tangle of partnerships, companies, and joint ventures. He was concerned that unless he simplified his interests during his lifetime, his family would find it difficult to get full value from his assets on his death.

We created structures to hold his business interests during his lifetime, and manage them following his death - or loss of capacity. This also made his estate planning more straightforward.

Explain your business succession and estate plans to your family

Our client wanted to pass on his businesses and personal wealth to his many children – some of whom were involved in the businesses – in a way that would be both fair and clearly understood.

We helped him work through the family, legal, and business issues. First we looked at who would take control of the businesses, and how to combine rewarding them for their efforts with simply passing on wealth to the whole family. Then we established a clear picture of his total wealth, including businesses and non-business assets, so that he could plan his succession. The final task was his alone: to explain his wishes – and the calculations behind them – to his family.

Restructuring a business in order to pass on some companies and convert others to cash

Our client had built up a portfolio of businesses. She wanted to pass some business interests to specific family members, and make sure that her estate included sufficient liquid assets for the wider family.

We restructured the existing businesses into stand-alone companies. Then we prepared her Will – setting out who would inherit which businesses. We then worked with her to sell certain business interests in order to generate the required liquidity for the long term. 

My business partner and I need to plan for what should happen when one of us dies.

A formula that allows a partner’s heirs to convert their holding into cash

Our client had built up a successful business with a long standing business partner. When he drew up a Will he realised his plans were very different from his partner’s. Our client wanted his heirs to be able to convert his holdings into cash – by selling them or winding up the business – but his partner wanted to pass the business on intact.

We advised our client to put in place an agreement where each partner had the right to buy the other’s share – at a price determined by an agreed valuation formula.  We also worked with the partners to draw up a list of assets that could potentially be sold to generate liquidity, without damaging the core of the business.

A third party who would represent the family’s interests in the business

Our client wanted to pass on several ongoing businesses. She was concerned that after her death disagreements about business decisions between her family and those operating the businesses would disrupt and damage the businesses.

We helped her create a structure under which a third party would, following her death, have power to take into account both the needs of the family, and the businesses.  This would ensure the value of the businesses could be protected for the family in the long term.

How do I make sure that my business succeeds after my death, but stays within the family?

A trust to control a family’s wealth and ongoing business

Our client wanted to keep his business within the family, but realised that the business would need experienced managers to run it following his death.

We worked with him to draw up a trust under his Will that would keep shares within the family. The trustees would have the final say on strategic business decisions, whilst the day to day running would be left to the management.  The family held a series of balancing powers over the trust.

A way to involve the family in the business and allow them to exit it

Our client wanted to pass some control of her business onto her family during her lifetime. We helped her set up a shareholding structure – with ‘golden shares’ that carried significant voting rights – and a shareholders’ agreement.

This agreement included a way to allow family members to sell their shares but keep them in the family – pre-emption rights gave family shareholders first refusal on shares – and buy-out clauses that determined the price of the shares.

I want my spouse to benefit from the business during her lifetime, but not control it.

A right to income, but not to control

Our client wanted to provide for his wife but make sure that his business continued to provide long-term funds for his children and grandchildren.

We helped him set up a trust that would give his wife an income from the business – via dividends – but no control over it, or access to its capital. The company put in place a dividend payment policy, to make sure his widow received sufficient income.

Revising the share structure to deliver an income and preserve the business

Our client wanted to pass on his business in a way that provided an income for his wife but preserved the company for the family in the long term.

We restructured the share capital so that there were different classes of shares with different rights. His wife received non-voting shares that delivered a valuable income; the voting shares were given to the family via a family trust.

“Are you planning to pass on the family wealth, or the family business? Sometimes you have to choose.”

Damian Bloom, Partner - Head of Private Client

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