What Does a Succession Plan Include?

• September 15, 2025
• Kelvin Birk
• Business Law

You have worked hard to build and run your business, and now it is time to pass it on to your successors. If you want your business to continue to prosper and grow once you no longer are taking an active part, it involves some careful planning. Depending on the size, structure, and complexity of your business, the process of passing it on can take anywhere from weeks to years to be completed, and there are laws that must be complied with to prevent problems and potential lawsuits from arising. Having a well-prepared business succession plan is essential to ensure a smooth transition of ownership and leadership.

In Missouri, business succession planning is not just for large corporations—it is equally vital for small businesses and family-owned companies to preserve value, protect employees, and maintain operational continuity. Your succession plan is a blueprint that ensures the business transitions smoothly when you retire, pass away, or can no longer manage it. Having a plan preserves business value, clarifies future leadership, and secures the company’s legacy.

What Are Succession Plan Components?

A strong Missouri succession plan should address ownership, management, legal, and financial considerations. While every business is unique, key components often include:

• Identification of Successors — Decide whether leadership will pass to family members, business partners, key employees, or an outside buyer. If you have business partners, would it work to sell out to them, or would it be better to sell to an outside party? Is there someone in your industry who would be willing to take on this role? If you are a sole proprietor, do you have family members who are willing and able to take over? Is there a trusted employee able to step in or would it be better to sell to an outside party? Ask yourself these questions and consider multiple successor options in case the first choice is unavailable.
• Business Valuation — Obtain a professional valuation to determine the fair market value of the business. This ensures equitable buyouts and fair distribution in estate planning as well as planning for tax purposes.
• Transfer of Ownership Structure — Specify how ownership will be transferred—via sale, gift, merger, or other legal methods. Address tax implications for the business and the new owners.
• Management Transition Plan — Once your successors have been named, they must receive proper training. Outline a training and mentorship schedule for your successors to prepare for leadership roles. Clearly define timelines for handover of decision-making authority and the date you will exit the business. Address the future management structure changes and the legal transfer process.
• Contingency Planning — Prepare for unexpected events such as sudden illness, disability, or death. Make sure to include insurance policies, emergency contacts, and short-term leadership designations should something happen.
• Legal and Financial Documents — Update corporate bylaws, operating agreements, shareholder agreements, and buy-sell agreements. Review wills, trusts, and powers of attorney to align with the succession plan. These documents should clarify transfer terms and trigger events. Check to see if there are required federal forms which can be found on the IRS website. For a sole proprietor, this includes Schedule C: Profit or Loss from Business and Schedule SE: Self-Employment Tax, and if any assets are sold, Form 4797: Sales of Business Property. There are also forms needed if the business is sold, for each person to whom you paid at least $600 for services, and for remitting excise taxes to the IRS.
• Funding the Transition — If the successor needs to obtain funds to buy into the business, determine the funding methods for the purchase or buyout, such as through insurance, savings, loans or installment sale agreements in order to ensure they can afford the transfer. Plan for minimizing tax liabilities associated with the transfer. Consult with professionals such as lawyers and accountants to ensure this is done properly.
• Communication Strategy — Decide how and when employees, customers, and stakeholders will be informed to minimize disruption. Communicate the succession plan to family, employees, and stakeholders to build trust and clarity.
• Coordination with Estate Plan — Ensure your business succession plan coordinates with your personal estate plan.

Sample Business Succession Planning Outline

Coming up with a business succession plan that works can seem overwhelming to busy business owner, and it can help to have an outline in place of specific steps to follow. Consider the following business succession planning outline:

1. Executive Summary — State the purpose of the plan. Come up with a statement of your vision, key objectives, and summary of process and your guiding principles throughout the process.
2. Business Overview and Ownership Structure — Write down your company history and mission. Include a description of business entity, ownership percentages, and management structure as well as an organizational chart.
3. Successor Identification – List your criteria for selection, identification, and training of successor(s). Include primary successor(s), backup candidates, and the criteria you will use for selection.
4. Succession Planning Team – List advisors you will need during the process, including: attorney, accountant, financial planner, business consultants.
5. Business Valuation and Appraisal – Decide on the methods you will use for determining the value of business shares, such as your company income, market, or asset-based valuations.
6. Transfer Strategy – Determine your method of transfer (sale, gift, merger). Include tax considerations to minimize federal and Missouri state taxes during ownership transfer. Agee on payment terms with your successor and the funding mechanisms for buyout. Draft and update buy-sell agreements, trusts, and partnership/operating agreements.
7. Management Transition Plan – Come up with a training and mentoring timeline and schedule delegation of responsibilities.  You may wish to plan interim leadership arrangements for the transition period.
8. Contingency Plans – Develop emergency leadership protocols. Include insurance coverage details.
9. Legal and Financial Documents – Be able to provide updated corporate records to your successor. Make any needed buy-sell agreements, and consider estate planning to have updated trusts, wills, and powers of attorney.
10. Communication Plan – Decide how and when to inform internal and external stakeholders and the process to do so.
11. Review and Update Schedule – Have a timeline for reviewing and revising the plan periodically.

How a Missouri Business Attorney Can Help

While it is possible to develop a business succession plan on your own, having help from Missouri business succession planning attorney will give you the peace of mind of knowing your business succession plan is comprehensive, legally sound, minimizes risks, and supports your business’s long-term success. A business succession attorney in Missouri provides can help with the succession planning process by:

• Drafting and updating buy-sell agreements to prevent disputes. Attorneys draft and review critical legal documents—buy-sell agreements, operating/shareholder agreements, wills, and trusts—to ensure the plan is enforceable and aligns with Missouri law.
• Helping with Business Valuation and Funding: Attorneys can arrange for business valuation and design creative funding solutions for buyouts.
• Ensuring compliance with Missouri business and tax laws. Attorneys work closely with accountants to structure the plan in a tax-efficient manner, helping minimize any possible tax liabilities during transfer.
• Helping with estate planning to integrate personal and business assets.
• Navigating family dynamics in closely held businesses. Attorneys facilitate open discussions between owners, successors, and family members to avoid conflicts and misunderstandings, thus protecting the business from potential litigation during transition.
• Providing Ongoing Support: Your lawyer can help review and update plans regularly as the business, legal environment, or personal situations change.

Get Help with Your Business Succession Plan

Without a proper succession plan, Missouri businesses risk losing value, experiencing leadership gaps, and facing unnecessary legal and tax complications. While being faced with passing on your business can seem overwhelming, you do not have to go through the process on your own. Attorney Kelvin Birk has helped many entrepreneurs and owners manage legal and financial issues and has received outstanding client testimonials from satisfied clients. Mr. Birk is both a lawyer and a certified public accountant, which means he understands the law, accounting, and a myriad of financial issues that arise with business succession, and is fully prepared to help you through the process in a manner that ensures your company’s legacy thrives for years to come.

For a free initial consultation, call the Birk Law Firm at 573-332-8585 to discuss your situation and see how we can help.

Get Help Now 573-332-8585

Attorney Kelvin Birk

Kelvin Birk is a lawyer as well as a certified public accountant, with more than 30 years of experience in accounting and tax and business consulting, and more than 20 years of experience in numerous legal matters. This combined expertise allows our law firm to provide a level of service above that of other firms. Whatever your legal situation, your attorney at Birk Law Firm can counsel you as to the tax implications. We have experience in providing myriad legal representation services to residents of southeast Missouri and other areas.. [ Attorney Bio ]