Tips for ensuring a smooth succession plan for your business
Whether you are considering selling your business, changing its structure, or ensuring continuity in unexpected circumstances, it’s important to understand the implications and to plan appropriately.
Changes in ownership or business structure
If you are thinking about selling your business, or perhaps a business partner is looking to sell their interest in the business, it’s important to be aware that under the legislation, registration is not transferable.
In cases where there is a change in the majority shareholder or the controlling interest of the business, a new application for registration may be required.
Business owners should plan ahead, and consult with TICO’s registration department to avoid any disruptions to their registration status.
What happens if a business owner passes away?
If a sole proprietor or the only individual listed as an officer or director on a company’s TICO registration record passes away, an executor or family member cannot automatically take over the business.
For the business to continue operating, there must be instructions for who will take over the business. Additionally, there must be a qualified individual who meets the requirements to be listed as the supervisor/manager on record and be capable of overseeing daily operations.
Without a proper succession plan, a business may face closure, potentially impacting clients and employees.
Take proactive steps
To ensure a smooth transition for your business, consider these tips:
- Develop a clear succession plan that outlines how the business will be transferred and managed in the event of a sale or unexpected circumstance.
- Obtain legal advice and ensure you have proper documentation.
- Contact TICO before making any major business changes, don’t wait until your renewal period to address them.
Planning ahead can help protect your business, clients and employees, while ensuring compliance with regulatory requirements.
Questions?
If you have any questions about how changes in ownership or management may impact your TICO registration, please contact tico@tico.ca or 1-888-451-TICO (8426).
