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Who Will Take Over the Business?: Succession Planning for the Canadian Business Family

Who Will Take Over the Business?: Succession Planning for the Canadian Business Family (1118089812) cover image

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As the first wave of Canadian baby boomers retire over the next few years, succession planning will be vital for the long-term survival of many businesses. Canada is about to see a huge transfer of wealth from this generation to the next, yet many businesses struggle to ensure a smooth transition of business management and ownership. For family-owned companies, the ramifications may be even more sweeping. The personal issues they face, compounding other day-to-day business concerns, range from planning for income taxes to maintaining interpersonal relationships with family members.

A good succession plan will manage a range of issues, such as people and talent, family dynamics, corporate structure, estate planning, insurance and share transfer, to name just a few. Who Will Take Over the Business? is for any business owner who wants to retire, sell, or transfer ownership of their business. It is designed to guide business owners through a comprehensive and strategic approach to the business succession process to ensure that the transition is carried out as smoothly as possible. Who Will Take Over the Business? is a must-have resource for every Canadian business owner.

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Table of Contents

Preface xv

PART I: VICTOR BANKS' DILEMMA

Chapter 1: Victor's Situation 3

Chapter 2: Discussion Time 11

PART II: SOLVING VICTOR'S DILEMMA: TAKING CARE OF THE BUSINESS

Chapter 3: Laying the Groundwork 19

Atlas Plastics: Hold or Sell? 19

Where Are We, and Where Do We Go from Here? 22

What's the Financial Picture? 25

Who'll Run Atlas if the Family Keeps It? 27

Chapter 4: How Do I Sell a Company? 35

Preliminaries 35

Getting Down to Business 39

Th e Process 41

Private Equity or Strategic Buyer? 46

Chapter 5: Talking Taxes—Making a Good Deal Better 53

Understanding the Tax Implications 53

Th e Estate Freeze and the Trust 54

What Are Victor's Tax Options? 56

Just What Is Wrong with the

Old Trust? 62

Chapter 6: Let’s Make It Legal—Getting the Deal Done 69

Private Equity Partner: Pros and Cons 73

Tying Up Loose Ends 75

PART III: RESOLVING VICTOR’S DILEMMA: TAKING CARE OF OTHER BUSINESS

Chapter 7: My Family Is My Business; My Business Is My Family 83

Defi ning the Business 83

Discovery Meetings 88

Deciding to Move Ahead Together 91

Chapter 8: I Invested My Life in My Business—How Do I Invest the Proceeds? 99

Defi ning the Goals 99

Deciding What Matters 101

Where Do We Go from Here? 104

Combine and Conquer 107

Chapter 9: What Should My Estate Plan Look Like? 111

Taking Care of Rose 112

What To Do about Robert 115

Planning for Victor and Anne 118

Chapter 10: Ensuring the Outcome—Innovative Insurance Solutions 125

Getting Down to Business 127

Epilogue 135

Appendix A: People in Victor Banks' Story 139

Appendix B: Financial Data: Atlas and Personal Assets 143

Appendix C: Th e Banks’ Family Empire Before and After the Private Equity Deal 145

Appendix D: Asset Allocation of the Investment Portfolio 149

Appendix E: Th e Insurance Solution 151

About the Authors 153

Index 159

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Author Information

Susan Latremoille and Peter Creaghan, experienced financial advisors who custom-design an investment portfolio for the family that provides lifetime income, tax sheltered, for Victor and Anne, and guaranteed liquidity for their estates

Steve Landau and Pearl Schusheim, who are the architects of a tax plan that provides a substantial tax reduction on their transaction and diffuses an overlooked estate planning problem

Tony Ianni, an investment banker who provides the Banks family with a variety of liquidity options to consider, and who ultimately leads the family through the private equity transaction

Ron Prehogan, a specialist in resolving family business conflict, and Arnie Cader, who acts as an independent director to the family and the business

Linda Betts, who helps the family identify and strategize regarding the softer issues, and manage the family dynamics

Sheila Crummey, who crafts an estate plan for the family, and her partner Frank Archibald, a corporate lawyer who provides practical advice to the family on the sale of the business.

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