How to Plan for Business Succession Without Losing Control
Dec. 1, 2025
Planning for business succession is one of the most important decisions an entrepreneur can make. It involves transferring the leadership or ownership of a company to the next generation or a new owner.
But while succession planning is essential for the long-term success of your business, it can also be a tricky balancing act. How do you make sure that the business continues to thrive without giving up too much control?
At the Law Offices of Julie A. Schejbal, CHTD, we assist clients throughout Dunkirk, Maryland, including Calvert County, Prince George’s County, Charles County, and St. Mary’s County. We understand the details of business planning and how vital it is to create a plan that aligns with both your business goals and your desire to maintain control.
With our support, you can effectively plan for business succession without compromising your vision for the future.
Why Business Succession Planning Is Crucial
Business planning isn’t just about making sure the business continues; it’s about making sure it thrives in the hands of the right people. Without a well-thought-out plan, you risk jeopardizing everything you’ve worked for.
Whether you’re passing on the torch to a family member, a trusted employee, or selling to an outside party, having a clear succession plan is essential for both the survival of the business and your peace of mind.
Succession planning can help:
Make sure there’s a smooth transition: Having a plan in place helps make the process smoother and avoids confusion when the time comes to transfer control.
Protect your legacy: It preserves the integrity of your vision, mission, and values as they’re passed on to the next generation or leadership.
Provide financial security: A well-done succession plan can also protect the financial interests of all parties involved, including your family, employees, and business partners.
Balancing Control in Business Succession
One of the main concerns when planning for business succession is maintaining control. As the owner, you’ve built your company from the ground up, and it’s understandable that you don’t want to lose the influence and authority you’ve worked so hard to establish.
However, a successful business succession plan involves relinquishing some control while still safeguarding your interests and vision.
Here’s how you can plan for succession while maintaining control:
Identify potential successors early: Start by identifying candidates who share your vision and values. Whether it’s a family member or a trusted employee, selecting someone you feel comfortable with will make the transition smoother and give you confidence in their leadership.
Establish clear roles and responsibilities: Define the roles of the new leaders within your business. This includes how much authority they will have and what decisions will require your input. Clear expectations will help prevent power struggles.
Use a gradual transition: Instead of handing over the reins all at once, consider a phased approach. This allows you to maintain control while giving your successor the time to gain experience and establish themselves in the role.
Legal Tools for Maintaining Control During Succession
Several legal tools can help you maintain control during business succession, providing a structured approach that aligns with your business planning goals. These tools can help balance ownership and management, ensuring the business's future remains in the hands of the right people.
Buy-sell agreements: A buy-sell agreement is a legally binding contract that outlines how ownership of the business will be transferred in the event of your retirement, death, or exit from the business. It specifies the terms under which your successor will buy your shares, protecting both your interests and those of your family or business partners.
Why it works: This agreement allows you to maintain control while specifying exactly how and when the transfer will occur. You can also set guidelines for valuation and the involvement of potential buyers.
Family trusts: If your business is family-owned, establishing a family trust can provide you with a level of control over the distribution of your business assets. By placing shares in a trust, you can designate who will manage the business on behalf of the family.
Why it works: A family trust can help make sure the business remains in the family, while still allowing you to set terms for how it will be managed and who can control it after your departure.
Employment agreements for successors: If you plan to pass control to an employee or partner, consider using an employment agreement that specifies their responsibilities, authority, and limitations. This can help protect your interests while allowing the new leader to take over the day-to-day operations.
Why it works: Employment agreements allow you to outline the terms of the succession clearly, giving you more influence over how the business will operate under new leadership.
Consideration of Tax Implications
One of the most challenging aspects of business planning is managing the tax implications. When transferring ownership of your business, there are several tax considerations to keep in mind. These can affect your personal finances as well as the financial health of the business.
Gift and estate taxes: Transferring ownership of a business to family members or other heirs can trigger gift or estate taxes. It’s important to plan ahead to minimize the tax burden. This can include using tax-free gifts, making use of tax exemptions, and working with your attorney to develop strategies that reduce the overall tax liability.
Capital gains taxes: If you sell the business, you may be subject to capital gains taxes on the sale. Proper planning can help minimize these taxes through strategies like selling over time or structuring the sale as an installment sale.
By working with an attorney and a financial advisor, you can create a strategy that minimizes taxes while still achieving your business succession goals.
Creating a Succession Plan That Works for You
Now that we’ve covered some key aspects of business succession, let’s look at how you can create a plan that works specifically for your business. To do this, follow these steps:
Assess your business’s needs: Take stock of your current business structure, leadership, and financial health. This helps you determine what type of succession plan will work best.
Define your goals: Are you planning to retire and exit the business completely, or do you want to remain involved in some capacity? Clarifying your personal and business goals will help shape the plan.
Select a successor: Whether it’s a family member, employee, or outside buyer, select someone who aligns with your vision for the company.
Establish a timeline: Set a timeline for the transition, whether it’s immediate or gradual. This gives you time to adjust and allows your successor to settle into their new role.
Document everything: Finally, make sure that everything is documented legally. Whether it’s a buy-sell agreement, trust document, or employment contract, have your lawyer draft and finalize the necessary legal documents.
Contact Our Law Firm Today
Business planning is a crucial part of securing your company’s future. With the right plan in place, you can safeguard the continued success of your business while still maintaining control over its direction.
At The Law Offices of Julie A. Schejbal, CHTD, our attorney offers comprehensive business planning services for clients in Dunkirk, Maryland, including Calvert County, Prince George’s County, Charles County, and St. Mary’s County. Contact us today to schedule a consultation and start planning for a smooth and successful business succession.