The Entrepreneur’s Corner

Here’s an important question for busy business owners – what’s next for your company? Not just tomorrow or even in the months ahead, but when the time comes that you or one of your key employees retires or leaves the organization unexpectedly?

At a time when many baby boomers are thinking about retirement, those who own a business need to plan not just for their life after work, but for the future of the firm they’ve committed so much of their lives to. In a small- or mid-sized business, the owner and perhaps other key personnel play such a vital role that special planning is required to prepare for circumstances in which any of these individuals is no longer part of the organization. If your business doesn’t have a succession plan in place, it is an issue that needs prompt attention.

There are a number of questions to consider in helping prepare for the period of transition a company inevitably faces. They include:

• Who is in line to follow the principals of the firm? The most fundamental aspect of a succession plan is to have a replacement (or replacements) in line. In many cases, a family business will move from one generation to the next. In other situations, a trusted employee or group of employees may need to be groomed and prepared to assume control of the company in the future.

• How will control of the business be transferred? Once successors are identified, there are a variety of ways that control of the business can be transferred to them. Among the options are an outright sale to the new owner – either in a one-time transaction or an installment sale – or the use of a trust vehicle, such as a grantor retained annuity trust (GRAT) or a grantor retained unitrust (GRUT). Those are irrevocable trusts to which you transfer appreciating assets while retaining an income payment for a set period of time. At either the end of the payment period or your death, the assets in the trust pass to the other trust beneficiaries (the remainder beneficiaries). The value of the retained income is subtracted from the value of the property transferred to the trust (i.e., a share of the business), so if you live beyond the specified income period, the business may be transferred to the next generation at a reduced value for estate or gift tax purposes.

An important consideration in the decision-making process is potential tax ramifications, particularly for the seller. There are tools available to help reduce the potential impact of capital gains, estate and gift taxes when a sale occurs. Good planning plays a critical role in making sure that both the seller and the buyer achieve the most favorable results.

• What forms of protection are in place in case an unexpected event occurs? The need to implement a succession plan can sometimes strike without notice. Businesses that involve partners or likely successors, for example, may benefit from having a buy-sell agreement in place.

A buy-sell agreement lets you keep control of your interest until the occurrence of an event that the agreement specifies, such as your retirement, disability, or death. Other events, such as divorce, also can be included as triggering events under a buy-sell agreement. When the triggering event occurs, the buyer is obligated to buy your interest from you or your estate at the fair market value. The buyer can be a person, a group (such as co-owners), or the business itself. Price and sale terms are prearranged, which eliminates the need for a fire sale if you become ill or when you die. Remember, however, that you are bound under a buy-sell agreement.

Business succession is a complex matter. It involves close work with a financial advisor, tax specialist and an attorney experienced in these types of matters to structure a solution that is most suitable for your business and potential successors.

Justin R. Martin is an associate financial advisor with Ameriprise Financial Services, Inc. Contact him at (804) 320-3105 or .(JavaScript must be enabled to view this email address).
Bail Bonds Chesterfield VA

New law paves way for delivery robots

Having your groceries delivered by a robot sounds like something out of The Jetsons, but that prospect is not as futuristic as you may think.

For the second year in a row, the Virginia General Assembly has passed a law to legalize the operation of autonomous vehicles. Beginning July 1, “electric personal delivery devices” will be allowed to operate on sidewalks and other shared-use paths throughout Virginia.

> Read more.

Virginia schools must soon test for lead in water

With the water crisis in Flint, Michigan, safe drinking water is a high priority nationwide, especially for children. Beginning July 1, schools in Virginia will be required to test their potable water for lead.

Senate Bill 1359, which Gov. Terry McAuliffe signed into law on March 20, seeks to ensure that local school boards test the drinking water in schools and that it meets federal guidelines. The Food and Drug Administration recommends that the level of lead not exceed 15 parts per billion. > Read more.

Business in brief


The Virginia Society of Certified Public Accountants (VSCPA) has announced its officers and Board of Directors for the 2017–18 fiscal year. At-large Board members include: Anne B. Hagen, CPA, of Masonic Home of Virginia in Henrico. The officers and directors were sworn in at the VSCPA’s annual business meeting on May 16 in Williamsburg. > Read more.

Free weekly 5k coming to Henrico

The Richmond metro area is no stranger to 5k races and events. To participate in most 5k events, runners must register and pay a fee. But the Parkrun organization will be providing Henrico County with a free 5k every Saturday at Deep Run Park starting June 3.

Parkrun began in England in 2004 and eventually found its way to the U.S.

The Deep Run Parkrun program will be the 10th one in the U.S., said Darrell Stanaford, the country manager for Parkrun USA. > Read more.

State Police urge motorists to #MoveOver during Memorial Day weekend

Memorial Day signifies the official start of summer, and Virginia State Police officials are urging motorists to "do what’s right when they see lights" and move over.

The “Move Over” law is a lifesaving law intended to protect public safety professionals and highway workers who help to maintain the safety of the Commonwealth’s roads. State Police are using the #MoveOver hashtag on social media to promote the law. > Read more.

Henrico Business Bulletin Board

May 2017
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West Broad Village’s Rock & Roll Summer outdoor concert series continues at “The Pad,” adjacent to Aloft Hotel at 3939 Duckling Dr., from 7 p.m. to 10 p.m. KOS Band will perform hits from the 70s, 80s and 90s. The concert is free and open to the public. Several parking decks feature free parking. The series continues every other Friday through August. For details, visit http://www.shopwestbroadvillage.com or www.facebook.com/WestBroadVillageShopping. Full text

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