|
|
Ian Gray is a specialist in Business Succession Planning, Exit Strategy Advice and Business Risk Management. He is the Proprietor of Ian Gray Solicitor, a legal firm based in Brisbane that services Advisers, Accountants and Clients in every state and territory of Australia. In 1987, Ian developed the Business Insurance Trust Agreement, a unique structure that allows business people and high net worth individuals to deal with all business, personal and self-managed superannuation insurance needs on one Insurance Policy. The Business Insurance Trust Agreement simplifies insurance arrangements that might otherwise have complex commercial, legal and taxation implications. The Agreement also documents Retirement Strategies for Multiple-Proprietor Businesses.
|
Welcome to Complete Succession!
Most business owners know they need a Business Succession Plan. The problem is they don't know what a Succession Plan looks like or what "jobs" it can do! Then, when you try to get advice, it's all jargon or gobbledygook, nothing makes sense, it takes forever to get an answer, and it costs a fortune! As a result, even if you've tried to get advice, the Succession Plan for most Businesses is still sitting in your in-basket. The aim of Ian Gray Solicitor (IGS) is to get your Succession Plan out of your in-basket and into the filing cabinet, so that you can have peace of mind!
Multiple Proprietor Businesses The Complete Succession Website is most suited to Businesses with Multiple Proprietors or Owners. This is because there is an identifiable Purchaser who has a commercial interest in acquiring your Equity in the Business (i.e., the other Proprietors). Equally, if one of the other Proprietors departs first, you will normally have a commercial interest in acquiring their Equity. However, in most cases, the Strategies discussed on the website can be adjusted to suit the needs of Sole Proprietors and Family Businesses. However, in these cases, there is the added challenge of identifying or finding a Purchaser or new Owner.
One Page Summary Click here to see an example of a "One Page, One Policy Succession Plan" for Insured Events. There is a One Page Summary of this Succession Planning Case Study here. Other Publications and Documents There are many similar One Page Summaries under the heading "Publications and Documents" here.
The Risk of Disruptive or Catastrophic Exit Events In any Business, there are a number of disruptive or catastrophic events that could require or result in the exit or departure of a Proprietor from the Business in the future. The most important of these Exit (or Departure) Events are:
Knowing the Right Questions to Ask A lot of difficult questions will come up if one of these events happens. The questions can be very different, depending on whether:
It helps to have thought about these questions in advance, and to have some pre-agreed answers that are acceptable to all of the Proprietors.
So ... What is a Business Succession Plan? On the Complete Succession website, the term "Business Succession Plan" means:
Purpose of a Business Succession Plan The purpose of a Business Succession Plan is to pre-agree a strategy that will enable the Business and its Proprietors to deal with the exit of a Business Proprietor upon:
Usually, the Business Succession Plan is a product of asking the right questions and coming up with answers that meet the needs of the Business and its Proprietors.
What "Jobs" Can a Business Succession Plan Do? Click here for an overview of what "jobs" a Business Succession Plan can do.
"Complete Succession Plan" When a Business Succession Plan deals with both Retirement and Insurable Events, IGS describes it as a "Complete Succession Plan". IGS describes a legal agreement that documents a Complete Succession Plan as a "Business Succession Agreement" or a "Complete Succession Agreement". "Simple Succession Plan" When a Business Succession Plan deals solely with the sale of a Proprietor's Equity in the Business in the case of an Insured Event, IGS describes it as a "Simple Succession Plan". A legal agreement that documents a Simple Succession Plan is often called a "Buy/Sell Agreement". The scope of a Buy/Sell Agreement is usually much narrower than a "Business Succession Agreement" or a "Complete Succession Agreement".
"One Page, One Policy Succession Plan" IGS is able to document a Complete Succession Plan for Insurable Events, so that all of the Cover required by a Proprietor is held on One Policy. This strategy is called a "One Page, One Policy Succession Plan". One Page Summary Click here to see an example of a "One Page, One Policy Succession Plan" for Insured Events. Alternative to Multiple Policy Approach The One Policy Strategy is an alternative to the traditional Multiple Policy approach.
The Benefits of Certainty If you have a Business Succession Plan, you will gain a level of certainty with respect to how a disruptive or catastrophic Exit Event will be dealt with. This certainty benefits all of the Proprietors, as well as the Business itself. It avoids damage to the Business and its Proprietors if the event occurs.
What Happens if You Don't Have a Succession Plan? Unfortunately, many Businesses are reluctant to think through the issues in advance. They are concerned that the issues can be complex and sensitive. Often, the Advisers to the Business don't have the temperament, skills or experience to time- and cost-effectively shepherd the Business towards a completed Succession Plan. The fear of complexity and cost is the one major reason why most Businesses never complete or update their Succession Plan. Unfortunately, this means that the problems that a Succession Plan is designed to manage or avoid could blow up and end up costing significantly more to remedy. Litigation about just one issue like the valuation of the Business could cost between $60,000 and $100,000, if not more. The dispute and cost can seriously damage the Business and its financial viability at the very time it is trying to recover from the loss of a Key Person. It is hard enough for Small Business to make a decent return on investment, without making donations to Litigation Lawyers! Many of the Advisers and Clients who use IGS' Services do so, because they have seen Businesses collapse under the pressure of disputes or costs.
Aim of Complete Succession Website The aim of this web site is to help you understand, design and implement your Succession Plan. Efficiently and cost-effectively.
The Complete Succession Methodology While the web site is comprehensive, it is designed to deal with important (and sometimes complicated) issues in a logical, common sense and commercial manner that is relatively easy to read and understand. The Complete Succession web site sets outs a methodology that focuses on the "jobs" a Succession Plan can do. It takes into account the legal and tax issues. It is not a substitute for Client-specific legal or tax advice. However, it is designed to help you understand the issues, so that you can give clear and relevant instructions. If you are not the type of person who likes reading (and you have got this far on the page!), please call to arrange a Free 20 Minute Teleconference.
Site Map Click here to see a Site Map of the Complete Succession Website.
Strategic and Commercial Material The strategic and commercial material explains the issues from the point of view of the Business and its Proprietors. Just click on the heading "Business Succession Planning" in the grey menu bar under the logo at the top of any page on this site.
Technical, Tax and Legal Material The technical, tax and legal material identifies the many traps and helps understand the "Toolkit" by which they can be avoided. No matter how complicated the strategic and commercial issues might seem, the tax and legal issues are worse. The IGS Systems and Documentation are designed to avoid the traps, so that you (and your Adviser) don't have to worry about them. This allows you to focus on the strategic and commercial issues, i.e., the "Deal" between you and your fellow Proprietors.
Adviser Updates See here for regular updates about Succession Planning practices and the Complete Succession web site.
Team Approach Ultimately, it's a lot easier to design a Succession Plan if we work as a team. The Complete Succession Strategy is a system and methodology that is designed to get everybody on the same page. Ultimately, it takes less time. And it's cheaper!
Feedback Client (Majority Shareholder) This agreement is long overdue and is a good first step for the four of us… You have made this exercise very easy for us, I wish we had been referred to you much earlier. Client (Managing Director of Third Generation Family Business) Many thanks for our Draft Succession Plan which I read with pleasure. Congratulations on producing this excellent document which very successfully distils the jumbled thoughts and concerns expressed in the meeting into a few much more manageable questions. I guess that's why you are an expert in this field. I believe that you have correctly ascertained the mood of the meeting and documented it accordingly. Client (Chief Financial Officer) Good morning Ian, Thanks for your informative presentation today. We have achieved more in an hour than I have been able to progress in 9 years. Adviser Just wanted to let you know how happy I was with the way you handled yesterday & perhaps, more importantly, you should know that (the clients) were extremely impressed & satisfied with the way it went. I think the term they used was "that bloke knows his shit". Click here for more feedback.
Succession Planning Glossary See the Glossary for more terms used in Succession Planning and the Complete Succession web site.
Services Provided by Ian Gray Solicitor Ian Gray Solicitor ("IGS") provides the following Succession Planning Services for Business Clients and Advisers in all states and territories of Australia:
Free 20 Minute Teleconference If a Client is uncertain whether to attend a Client Meeting or use the IGS Documentation Service, IGS offers a free teleconference (of up to 20 minutes) with the Client to explain the purpose and benefits of a Complete Succession Plan and the "One Page, One Policy Strategy".
Complete Succession Plan IGS assists Clients and Advisers to develop and document a "Complete Succession Plan". This strategy is most suited to Businesses with Multiple Proprietors or Owners. However, in most cases, it can be adjusted to suit the needs of Sole Proprietors and Family Businesses. A Complete Succession Plan can deal with both Insurable Events (such as Death and Disability) and planned Retirement. IGS provides Succession Planning Services in consultation with the Client's Adviser using a fact-finding process (the "One Page, One Policy Strategy") that assists the Adviser address Technical, Marketing and Underwriting issues with confidence. For more information about Business Succession Planning and the Complete Succession Strategy, click here. Alternative IGS Business Succession AgreementsIGS offers a number of alternative Business Succession Agreements on a Fixed Fee basis:
Simple or Complete Succession Plan These alternatives give the Business a choice of Agreement, depending on whether it requires a Simple Succession Plan or a Complete Succession Plan. Click here to read about the difference between the two types of Succession Plan. IGS can use any one of the Agreements to document a Simple Succession Plan. However, it uses either a Business Insurance Trust Agreement or a Hybrid Business Insurance Trust Agreement to document a Complete Succession Plan.
Identity of Policy Owner and Trustee Self-Ownership Business Succession Agreement If a Self-Ownership Business Succession Agreement is used, the Policy Owner will be the Life Insured personally. A Trustee is not required for the Self-Ownership Business Succession Agreement. Business Insurance Trust Agreement If a Business Insurance Trust Agreement is used, the Policy Owner will hold the Policies as a Trustee. The Policy Owner and Trustee is usually the Clients' Business itself or one of the entities within the Business Structure (preferably a Company). IGS does not use an Institutional Trustee Company. Click here to read about your choice of Trustee. A Trustee is not required for the Self-Ownership Business Succession Agreement.
Fixed Legal Fees The Fixed Fee charged by IGS depends on the choice of Agreement. Click here to see the current Fees for all Agreements and Services. These Fees apply subject to the Legal Fee Policy.
Primary Focus of Complete Succession From a management point of view, it is important to design business strategies that:
These management strategies are not the primary focus of this web site. Complete Succession is primarily concerned with the family, commercial, financial, legal and taxation implications of:
Important Notice The information and opinions on this web site are not intended to be acted or relied on by any Business or Adviser, except on the terms of a formal fee-for-service Lawyer and Client relationship with IGS pursuant to which IGS:
Putting Common Practices to a Common Sense Test The Complete Succession Strategy is based on a common sense approach to the needs of Business. It assumes that Business People prefer strategies that meet the commercial needs of the Business and satisfy the test of common sense. The Role of the Lawyer and the Legal Agreement Business Succession Planning is an area where the Commercial Strategy is primary. The Legal Agreement is important, but secondary. It is a servant of the Commercial Strategy. It is a vehicle or engine that drives the Strategy. Once the Strategy is formulated, the question is: what legal engine is required to implement it? The Business Insurance Trust Agreement This is the origin of the concept of a Business Insurance Trust Agreement. This Agreement is an engine that drives a Complete Succession Plan. Many Advisers are unfamiliar with the concept of Complete Succession and continue to adhere to historical practices that appear to "do the job" or at least one part of it. They continue to focus on the "buy/sell strategy" in isolation from the other needs of the Business or the Proprietors. This practice means that the legal engine is restricted to a buy/sell strategy in isolation from the other components of a Complete Succession Plan. The Chains of Habit The adherence to historical practices is natural and understandable. Thomas Paine described it well in “Common Sense” in 1776:
This web site is designed as a polite argument in favour of common sense, even if it offends commercial custom, legal precedent or adviser's habit.
Note re Your Web Browser: This website has been designed for maximum compatibility with Internet Explorer 7 and 8. If you experience any problem with Internet Explorer 8, you might need to click the "Compatibility View" button between the address bar and the green "refresh" button at the top of the IE8 window.
|
Adviser Support System IGS offers different ways to work together, depending on how actively an Adviser wants to promote Business Succession Planning and Business Insurance. If you expect to have more than one Business Succession client a year, you might benefit from acquiring a Licence to use the IGS Adviser Support System. A Licence can assist you and reduce the cost of your Client's Succession Plan. The main benefits are free Client Meetings and Teleconferences in most capital cities, as well as a discount of $440 with respect to a Business Insurance Trust Agreement.
Ian Gray travels to most capital cities regularly throughout the year and is available for Meetings. Please click here to see his availability in Brisbane, Sydney, Melbourne, Adelaide and Perth. Please contact us to arrange an appointment or teleconference. |
