Business Succession PlanningEnsure your business interest passes to your chosen beneficiaries
The Scottish Government recently published their guidance to help public bodies develop effective succession plans for their Boards.
The raison d’etre of such succession planning is to ensure highly effective, diverse Boards preserve their knowledge and expertise when members are replaced. Promoting Board diversity is more than a ‘box-ticking exercise’ - such groups are more likely to better understand their full spectrum of stakeholders and will benefit from the fresh ideas and wider perspectives that their members will have. Moreover, a Board whose composition reflects the communities it serves will most likely be better received and engender greater trust.
This is also a timely reminder for private clients who wish to leave their interest in a business to chosen beneficiaries. We advise those clients who are company directors and/or shareholders to review their affairs regularly and to ensure that their personal succession planning reflects their wishes accurately. One should consider the constitution of the business – the memorandum and articles of a company or any partnership agreement. This is because transfers of partnership and company shares may be restricted or have pre-emption provision attached. The latter is when a company’s constitution provides shareholders with first refusal of the deceased’s stake before they are distributed in accordance with their Will.
If you would like us to review your affairs, to ensure that there is no conflict between your Will and business constitution, or if you have any questions in general, please contact our expert Private Client team here at Clyde & Co and we would be delighted to help.
0131 525 8674