Your family business is part of your legacy. Knowing that you want to pass it on to someone in your family means thinking about how your best options for transferring the company. Two options presented to family businesses include a family limited liability company and a family limited partnership. Both of these are entities in which assets such as equity interest, real estate, and marketable securities can be placed from privately held companies.
These are just a few ways to successfully pass on assets associated with your family business to a future generation. Deciding which of those strategies are most appropriate depends on your individual situation and your consultation with professionals such as a CPA and an experienced business succession planning lawyer in Michigan.
These entities are then covered by LLC or partnership agreements that determine the way in which the entities will be managed and what stipulations there are around transfers, distributions and dissolution. Both FLLCs and FLPs provide asset protection in the event that a creditor attempts to attach the underlying assets.
This is one strategy for a senior generation owning a family business to transfer assets to the successor generation while still maintaining control of the general partnership interests or being named as a managing member of a managed FLLC. Consider speaking with a Michigan business succession planning attorney to learn more.