Academic journal article Journal of Accountancy

Family Business Succession Checklist

Academic journal article Journal of Accountancy

Family Business Succession Checklist

Article excerpt

A common consulting engagement for CPAs is helping a closely held business client plan for management succession. The issues to be considered and the approach to take involve working closely with the client to disclose data on the company and its industry, employee stock ownership plans and the possibilities of outside sale, merger or liquidation. The first step, though, is to prepare a checklist of family and key employee information:

Family information

1. Who are the family members currently involved in operating the business?

2. What are their job descriptions?

3. How are they compensated?

4. Which family members are not involved in operating the business? What businesses are they in?

5. What business and educational experiences do they have?

6. Do any family members not involved in operating the business have an ownership interest in the business?

7. What are the relationships of the people staying in the business?

8. Are any family members in the business qualified to be president or managers? What is the basis for the determination?

9. Can the family member who is selling the business retire when and in the manner desired if family succession is chosen rather than outside sale?

10. Have any promises to or agreements with family members and key employees been made?

11. …

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