Business succession plans

To ensure that your business passes to your ideal successor, carefully craft a business succession plan that clearly articulates who will eventually get the business, sale price, purchase terms and possible trigger events.

5 types of succession plans

A successful business succession plan outlines who, how and when your business will pass to another person or company when you retire, are disabled, or pass away. Most plans involve a buy-sell agreement, secured with life insurance or a loan. The five most common types of business succession plans are:

1. Selling your business to a co-owner

If the business was founded with just two partners, the surviving partner could agree to purchase the other’s interest if one owner retires, dies, or becomes disabled.

2. Passing your business on to an heir

Popular with business owners who have children or family members who work in the organization, this type of agreement needs proper planning, so as not to stir up family conflict.

3. Selling your business to a key employee

Choosing a key employee to take over can help you ensure that your business will be run by someone who is experienced, respected by your staff, and knows the essential procedures and relationships.

4. Selling your business to an outside party

Depending on the type of business you have, if there isn’t an obvious successor, you may look to the community to sell your company – perhaps to a local entrepreneur or a competitor.

5. Selling your shares back to the company

If your company has multiple owners, establishing an “entity purchase” or “stock redemption” plan will enable the surviving owners to keep control of the business by purchasing the shares of the owner who retires, passes away or becomes disabled.

In all these cases, life insurance can be used effectively to ensure that funds are available when it’s time for the business to pass from one owner to another.

Why Equitable?

Expertise in a complex business area

With Equitable, you have access to professionals who understand the needs of small business owners and can help you put a plan in place to ensure that your business passes to the successor of your choice.

Financial strength to fulfill our promises

Equitable Financial Life Insurance Company and Equitable Financial Life Insurance Company of America, premiere providers of life insurance and annuity products, have been helping individuals reach their most important goals.

Wide range of products to fit your needs

Equitable has a range of permanent life insurance products and riders that can be utilized to tailor your buy sell agreement or fulfill your business succession needs.

Next steps

Want to find out more? Call 844-4-BIZINFO (844-424-9463) to schedule a time to work together on customizing a strategy to meet your specific needs.

All group insurance products are issued either by Equitable Financial Life Insurance Company or Equitable Financial Life Insurance Company of America, which have sole responsibility for their insurance and claims-paying obligations. Some products are not available in all states.

Equitable and its affiliates do not provide legal or tax advice, clients should rely on their own advisors on these matters. 

Life insurance products are issued by Equitable Financial Life Insurance Company (Equitable Financial) or Equitable Financial Life Insurance Company of America (Equitable America) and are distributed by Equitable Network, LLC and Equitable Distributors, LLC.

GE-130985 (11/2017) (Exp. 11/2019)