Texas residents who own small businesses should also think about what they want to do when they are ready to retire or leave the business in some other way. They can choose to either sell the business or pass it on to a family member. However, it is necessary to lay the groundwork for doing so early.
Those who hope to sell their companies someday should build the value of the business and identify potential buyers. This should be done over a period of years, but business owners should not delay a sale for too long either. The buyer could move on or the business could lose value.
A living trust can be a good option for an owner who wishes to pass the business on to another. One advantage of living trusts is that assets such as property, copyrights and patents can easily be placed into one. A living trust for a multi-state business means avoiding probate across multiple jurisdictions. However, some organizational structures can make a living trust more complex. A majority of owners in an LLC have to agree to the trust.
It is never too early for people to think ahead to how they might want to move on someday from their small business, but it is especially crucial for owners as they get older. Still, business owners of all ages may benefit from looking ahead and getting structures in place that will ensure their wishes are carried out and that will allow them to either pass the company on or profit from a sale. The business may even want to keep this in mind while forming the business and choosing the type of entity that it will be. An attorney may be able to assist in making the best choice.