Planning for your business and your family

A company keeps running on Monday morning whether or not its owner is there. Payroll falls due, suppliers invoice, the bank expects its signatory. Business succession planning is the work of making sure that when the owner is suddenly absent, through death or lost capacity, the company, the family and the estate do not pull in three different directions.

What actually happens without a plan

Consider what your shares are. They are personal property, so on death they pass through your estate: under your will if you have one, under intestacy law if you do not. Either way, they do not move until probate is granted, which in Singapore is measured in months. During those months, the people running the company may not be the people inheriting it, and neither group may be able to act cleanly.

Lost capacity is often harder than death. If you have not made a Lasting Power of Attorney, nobody can step into your personal decisions without a court appointed deputy, and your company documents may be silent on who votes your shares while you cannot. Bank facilities personally guaranteed by you become a live question. A business built over decades can stall on the signature it always relied on.

Then there is the family side. A spouse who inherits half a company they never worked in. A co-founder who suddenly has heirs as shareholders instead of a partner. A valuation nobody agreed while everyone was alive and friendly. None of these are rare. They are the default, because the default is that nothing was decided.

The questions a succession plan answers

Proper planning for an owner in Singapore usually has to answer six questions, and answering them in writing is the whole point. Who runs the company the week you are gone, and do they have the authority on paper to do it. Who votes your shares during probate, and what do your constitution and any shareholders' agreement actually say about death and incapacity. How are your shares valued, and does the family have to become shareholders at all, or should an agreement let your partners buy them out at a fair, pre-agreed mechanism. Where does the money for that buyout come from, since few companies keep that kind of cash idle. How do personal guarantees and director loans unwind. And how does all of this line up with your will, your nominations and your family's actual needs, so the documents do not contradict each other.

The work we do

Our role is coordination, and with a business in the picture, coordination is most of the battle. We map what exists today: shareholdings, the constitution, any shareholders' or buy-sell agreements, guarantees, key licences and the people the company cannot function without. We identify where the documents disagree with each other or with your intentions, which is common, because wills, agreements and constitutions are usually written years apart by different professionals who never met. We then work alongside your lawyer, your accountant and, where relevant, our preferred partners, to close the gaps in a sensible order, and we record the whole arrangement in your Legacy File so that the people who need to act can actually find it.

We follow the same three appointment process as every engagement, and fees are discussed and agreed with you before any work begins. You remain free to implement any part of the plan through professionals of your own choosing.

When to do this

The best time to do this work is when things are calm and nothing is wrong. Succession arrangements agreed while everyone is healthy and on good terms tend to be reasonable and inexpensive. The same arrangements, worked out during an illness or between a grieving family and a surviving business partner, are usually costly and rarely end well for the relationships involved. If your company has more than one shareholder, or the family depends on its income, or the bank holds your personal guarantee, the right time was some years ago and the second best time is now.

General education for Singapore business owners, not legal, tax or financial advice. Company law outcomes depend on your constitution and agreements; take advice on your own documents.