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Is Giving Your Business to Your Children the Best Way to Sell it?


Business Giving to Your Children - Business ArticlesReasons to Sell

A lot of people sell out their businesses due to various reasons, to pay the debts that can no longer be paid by the money made by the company, the owner cannot manage the company anymore, the business has become non-profitable, or the owner does not want to do business anymore, etc. Out of the many options to sell the business, the one quite favored is to pass it on to the heirs, this way the business and the hard work that goes with it, does not disappear. In fact, it stays on and more often than not, it grows because of the difference in strategy or the new approach the heirs may apply to the business.

Very easy and simple, it may sound; passing the business to your heirs is not as simple as asking them to take over and start managing.

A few things to consider while thinking of passing on your business to your heirs are:

  • The tax limitations may make it difficult to pass on the business if the share prices of your business are high. The allowance of giving your heirs the control is set to certain limits. If you want to avoid the tax and if the share prices are higher, then it may make it difficult to pass on the business without incurring some high costs. It is a good idea to look at selecting an heir in the early stages of the business to make the process go smoothly.
  • Another thing to look at is the heir you can pass the business on to. If your business is in tough waters, you will need to carefully look at all the possible candidates who will be focused and have the skills to bring the business out of the situation, else they may end up adding more debts to it.
  • It is also important that the heir has a good understanding of the business, learning the ropes while the business is struggling, is not the best place for anyone to start. If you have one or a few heirs in mind, familiarize them with the way the business works as soon as you can to help them be better at it and to identify which of your heirs can do justice to your business when you decide to pass it on.
  • If you have not mentored an heir, and need to sell out your business then added and stringent methods may need to be used. Thorough understanding, working with you for a decided time frame before they begin to manage on your own, sharing your experiences and helping them understand your best practices are some other ways to help them start out right.


The idea of selling out your business to your children is a good one but only if you have equipped them to successfully manage it, and if they have the skills to do justice to it. Also, don’t forget, your heirs will be your replacement for your employees and all the people who you deal with, his/her acceptance as someone reliable is extremely crucial in such scenarios.

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