Business succession planning- Use an ESOP to provide certainty

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Business succession planning- Use an employee share plan to provide certainty


Business succession planning- Use an employee share plan to provide certainty

By , August 24, 2009

“You don’t really have to convince anyone about the benefits of employee share plan; it’s self evident. Engaged employees want to have a stake in their company – surveys (and everything else) show that .And it’s good for the business those employees work for.” Paul Bailey, tax principal at Deloitte.

As the government reviews the taxation treatments of employee share plans – many others spend time wondering why they don’t further promote and encourage them. The benefits are clear for both employees and the business and there are many success stories where performance has improved and the employees now own a slice of the company they work for – thinking and acting and being rewarded as business owners not employees. “For companies, a key benefit of having an employee share plan is the way it helps align the interest of its employees with its own interests.” – Money magazine August 2009.

When combined with a strategic succession plan, which allows a gradual sell down of ownership equity to employees as part of the plan, the two combine to provide certainty in the exit process – certainty as to timing, price, funding ( ownership succession ) and a managed transition of control ( leadership succession ).

Craig West

Craig West

Managing Director | Succession Plus

Craig West is a strategic accountant who has over 20 years’ experience advising business owners. His background as a CPA in public practice, provided invaluable experience in the key issues of concern to business owners. Following 6 years of study to gain two masters degrees, Craig focused on Capital Gains Tax (CGT) for business sales advising on strategic management of tax issues. This experience formed a very strong view that business owners (and often their advisers) were unprepared and unaware of the steps required to prepare a business for exit.

Craig now acts as a strategic mentor for mid-market business owners and has written four critically acclaimed books on employee incentives, succession planning, asset protection and exit strategies. Craig has conducted numerous seminars and keynote presentations throughout Australia & internationally, including adviser education programs for the Institute of Chartered Accountants and CPA Australia.

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