Tax and business planning is important for the success of any organization, but especially for the family-owned enterprise. Here are some important questions that owners of family businesses need to address.
1. Do you have a plan?
2. Who's running the store - family, outsiders, or employees?
3. Should the legal form of the organization be changed?
4. Have you reviewed your retirement and fringe benefit plans?
5. Are formalities observed?
6. Who's next in line?
The survival of any family business depends on how wisely one generation passes ownership to the next. The more family members, the more complex the situation is likely to become.
When deciding when and how to transfer your business, consider estate taxes. The IRS's share, with today's high estate tax rates, could fatally weaken the business's cash flow.
Facts show that only 30% of family-owned businesses survive to the second generation, and only 13% survive to a third generation. Careful planning while you're still at the helm may prevent the demise of your business.
At Mosford, Barthel & Co., PLC., we've been serving the accounting needs of Monticello, MN and the surrounding areas for years. If you need help managing any aspect of your home or business's finances, we want to hear from you.
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