How to get started on business transition planning

A recent CIBC survey found that close to half of the owners or executives in Canadian companies plan to transition their business over the next ten years.

When considering business transition, a plan is key in ensuring you get a good price for your business, finding a good buyer (if selling), and completing a smooth transition to the new owner.

A business transition plan has many benefits, regardless of the size of your business and what stage of the business cycle it's in. An effective succession plan will help you:

  • arrange for the tax-effective transfer of your company's ownership and management
  • maximize the value of your business before transition
  • structure a retirement income that meets your needs and maximize your financial security
  • protect against unforeseen events, including death and disability
  • accomplish the smooth transfer of your business

While it may seem to be a daunting task, remember that your CIBC business advisor can help you by working closely with you and drawing on the expertise of CIBC specialists and other professionals. Your advisors will provide you with:

A diagnosis of your situation.
Is your business prepared for a successful succession? Are your estate and retirement plans up-to-date? Are you already working with qualified specialists (lawyers, accountants, tax experts)?

Objective advice and planning guidance.
Based on the diagnosis of your situation, your CIBC advisors can discuss your specific transition planning needs and any special considerations, such as transferring to a family member, selling to a key person, or selling a farm business.

Solutions tailored to your needs.
A documented action plan will draw together the investment and retirement elements of your transition plan. This acts as a valuable reference for you, your CIBC business advisor, and other CIBC specialists. As your business grows and evolves, your succession plan should be updated so that it continues to meet your needs.

Depending on the nature of your business and your objectives, your transition plan may include several documents. In addition to a will and power of attorney, you may also need a shareholders' agreement, partnership agreement, buy-sell insurance, or one or more trust agreements.

While your CIBC advisors can help you establish the structure of your overall plan, you will need the services of lawyers, accountants, and tax specialists to draw up the various elements.

Your advisors can help you build an advisory team, provide guidance on investment and retirement planning, and address your concerns. Don't put off this important task. If you don't already have an up-to-date plan, contact your CIBC business advisor.

Advice Centre Business Transition Planning

Learn how to balance the day-to-day needs of running your business while planning for the eventual transition of your business to new owners.