Operating a profitable business is no simple task, but ensuring that it will remain viable across generations is a challenge in and of itself. Far too many promising businesses fail to make the transition properly, but with the help of experienced CPAs, you don’t have to be one of them.
Any skilled CPA knows that planning ahead is everything, whether it’s getting the most out of tax planning opportunities or carrying out effective risk management. Business succession is no exception. Depending on the structure and scale of your business, as well as your intentions for succession, the process should begin at least five to ten years in advance. A chartered professional accountant will therefore play the integral role of factoring a future succession into various aspects of your accounting and tax planning. They will help you optimize the company finances to make the transition of ownership and management as effective as possible.
Minimizing Tax Liability
Business succession can be a taxing process, both figuratively and literally. One of the more important forms of taxation to take note of in this context is capital gains tax. The disposition of company assets (including shares and property) may amount to capital gains that are subject to a significant tax burden. You may be selling personal shares to an outside party, selling company-held shares and/or property to an outside property, or handing assets down to an heir. Whatever the case may be, a skilled CPA can help you maximize the value of your succession by exploring a wide range of tax planning strategies that may apply to your circumstances.
Why It’s Crucial
Roughly 30% of family-owned businesses make it through a generational transition, and even fewer stay in operation into a third generation. The importance of having all hands on deck when it comes to succession therefore can’t be overstated. CPAs are not the only people you need to work with during this process, but they’re an essential component, especially if you hire corporate accountants and tax specialists who have experience with a broad range of business types. Foster a strong relationship between your company and a dependable CPA and you’ll be all the more prepared to ensure the longevity of the business you’ve worked so hard to build!
Our Calgary-based team of chartered professional accountants won’t simply fortify your company’s finances and tax strategy in the short term. They’ll help you turn your successful business into a powerful legacy. Give us a call at (403) 768-4377 for a free consultation today.