About OMS. At some point, an owner of a closely held business must consider the future ownership, management and control of the business. In many instances, both family members and key employees are considered as part of the transition process. We refer to this transition process as ownership and management succession (“OMS”). The overriding concern in OMS is maintaining stability so that both the business and the owner’s family continue to prosper.
Specific Services. Our more than 25 years of experience in working with privately held businesses involved in the OMS process, gives us great insight into the process and the expertise to offer:
- Consulting with owners, family members and often key employees on their goals and perspectives about the business. The goals of the current owners may differ among each other and from those of the next generation. Gaining a full understanding of the landscape is critical to developing the right OMS plan so that it “works”.
- Working with owners to retain key employees who are non-owners. We work with owners to develop plans to retain key employees and give them an incentive to remain loyal to the business before, during and after any ownership transition. In many instances, we have helped institute qualified and non-qualified deferred compensation and bonus plans, and statutory and non-statutory stock option plans. Some of these plans include non-competition, confidentiality and other provisions designed to protect the company’s interests.
- Working with family members. Generally, parents tell us that they want to treat their children “equally” in wealth transfer situations. “Equally” does not have to mean equal ownership or management of a business. We have worked with business owners to develop plans that consider each family member’s contributions to the business. The appropriate OMS plan may not result in all family members having an equal, or any, ownership interest, management voice and/or compensation package. The business owner may tailor his or her estate plan to “equalize” wealth transfer.
- Working with trusted advisers. We generally seek out the opportunity to work with the owner’s other trusted advisers, such as accountants, family business consultants, bankers and even other attorneys to facilitate and manage the OMS process. We recognize the importance of the perspective and insight that such advisers can provide. Our experience in this area has allowed us to develop an approach that honors all input and mitigates against any conflict.
- Developing specific OMS plans to meet the owner’s unique desires and circumstances. Not every OMS plan is the same and we have worked with the owners to provide a customized plan to meet their desires. We have helped business owners, key management and the next generation in the transfers of ownership. We have utilized gifts, outright sales, installment sales, sales to “intentionally defective” grantor and other trusts, self-cancelling installment notes, annuities and other similar devices, and transfers to family limited partnerships or limited liability companies. Sometimes, the appropriate plan results in mergers, acquisitions and divestitures involving third parties, and corresponding plans to protect the resulting wealth for the family.
- Creating effective documentation to appropriately address issues, which if left to chance would likely adversely affect the business and the families involved. Our experience has taught us how to address potentially difficult issues in a caring and systematic manner. Our approach is designed to help mitigate, and in some instances prevent, unexpected situations from adversely impacting the business and the families involved. We provide documents that address the potentially harmful impact on OMS by such unexpected events as deaths, disability, retirement, divorce and even bankruptcy.