Wealth Management: What is succession planning? Why is succession planning important?
Succession planning allows business owners to deal with their businesses in an organised manner in the event of premature death, total and permanent disablement or retirement.
The sudden loss of a business owner without proper succession planning will affect the goodwill of the business and may cause liquidity problems.
It is even more important if the family members have no knowledge, expertise or interest in continuing the business.
As a business owner, you should begin succession planning early to ensure an orderly and efficient transfer.
With a succession plan, you can:
- Minimise the risk of family disputes and business disruption
- Retain shareholdings of the business within the family or transfer it to persons of your choice
- Plan your exit from the business
succession plan, you can minimise the risk of family disputes and business disruption
Reprinted with permission from BankingInfo (A Consumer Education Programme by Bank Negara Malaysia)
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