{"id":4657,"date":"2016-04-04T10:47:37","date_gmt":"2016-04-04T15:47:37","guid":{"rendered":"https:\/\/ability-fl-prod.internetbrands.com\/ability-law\/smallbusiness\/closing-a-business\/succession-planning-for-small-businesses.html"},"modified":"2026-08-09T09:24:57","modified_gmt":"2026-08-09T14:24:57","slug":"succession-planning-for-small-businesses","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/smallbusiness\/closing-a-business\/succession-planning-for-small-businesses.html","title":{"rendered":"Succession Planning for Small Businesses"},"content":{"rendered":"\n
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Succession Planning for Small Businesses<\/h1>\n\n
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\n By Susan Buckner, J.D.<\/a> | Legally reviewed by Catherine Hodder, Esq.<\/a>\n | Last updated\n
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Editorial Note: We earn a commission from affiliate partner links on FindLaw. Commissions do not affect the editorial integrity of our legal content.<\/p>\n\n <\/div>\n \n

\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
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This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

\n \n <\/i>\n Fact-Checked\n <\/summary>\n\n
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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n\n\n

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Key Takeaways<\/h2>\n

A business succession plan<\/span> outlines the process for transferring company ownership and leadership when an owner dies, retires, or becomes incapacitated. This strategy maintains business continuity<\/span>, protects company valuation, and prevents costly legal disputes among successors, family members, or partners. By establishing clear triggering events<\/span>, business valuations<\/span>, and ownership transfer timelines, a succession plan ensures seamless operations while protecting the owner\u2019s retirement and legacy.<\/p>\n\n <\/div>\n <\/div>\n<\/div>\n\n\n

Getting a business started takes a lot of effort. Some entrepreneurs might be too focused on the present to consider what may happen further down the road. Business succession planning<\/span>, like estate planning<\/span> or divorce planning, can get overlooked in the excitement of starting up and moving forward. Without an exit strategy<\/span>, business succession can be a legal nightmare for the participants.<\/p>\n

This article explains what a business succession plan<\/span> is, why you need one, and how to develop a strategy for your business that ensures it moves forward even if you\u2019re no longer there to guide it.<\/p>\n

The Business Succession Plan<\/span><\/h2>\n

A business succession plan<\/span> is a legal process that lays out an action plan<\/span> for transferring ownership of the business and assets if the owner or any high-level officer dies or is unable to continue working. Each business should have a specific succession plan to ensure that business operations<\/span> continue after the principal or owner leaves. For instance, a law firm might need to name a new senior partner, while a restaurant might have to replace key employees<\/span> who left with the departing individual.<\/p>\n

A succession plan is essential for any business, keeping the business operating after any upheaval or major change in the business structure. A good succession plan should have provisions for all of the following:<\/p>\n