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The issues that should be considered when disposing of the family business.
KEY POINTS
- Impact of cash on a company’s trading status.
- How selling shares can benefit the trade.
- Effect of Statement of Practice 2/1982.
- Buyouts may be a more satisfactory way of passing on the company.
How to pass a family company from the parents to the children was discussed in the Readers’ forum query Retirement plan. Several aspects of the planning require more detailed consideration than was possible within the confines of the Readers’ forum and I will look at these in more detail as well as other ways in which the succession planning could have been carried out.
The trading company was owned 50:50 by a husband and wife who were in their early 60s. The company had £8m cash and £9m...
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