Just as a well executed exit or entrance can transform a theatrical performance, the world of business demands careful planning when it comes to transitions. Exiting a successful venture shares parallels with stepping off a stage, demanding deliberate consideration rather than leaving it to fate.
How you exit a successful commercial entity is vital. This isn’t something you can leave to chance – it must be done in a smart, considered way to ensure success.
In the cut and thrust of day-to-day commerce, it’s understandable that many business owners put off the task of exit strategising, but sitting down and planning ahead will help reap rewards when it comes to maximising return on investment - as well as offering peace of mind for the future.
Goodbody and AIB Capital Markets recently collaborated on a survey of Irish business owners to discover what exit planning, if any, they had in place. It showed that:
SHARE
SPONSORED CONTENT
hyhyyhhy
Potjujujuju business
The What’s Your Plan report conducted by Goodbody, following an extensive amount of research of Succession planning throws up some revealing results:
Are you exit ready?
Business exits are full of unexpected details, so plan yours early
When owners consider the prospect of exit they often think exclusively of a business sale, but other extraction tools are available. Changes in the Finance Act 2022 also offer business owners new potential benefits.
The new rules permit substantial further funding through Personal Retirement Savings Accounts (PRSAs) for business owners and family members who are remunerated for their service to the business.
Salaries, bonuses and directors’ fees are the most straightforward method of paying owners, but dividends aren’t usually as attractive given they are subject to dividend withholding tax and cannot be deducted against corporation tax.
The information in this article is based on tax law as at 31 December 2022. It is for general guidance on matters of interest only, and does not constitute professional advice. Nothing in this document constitutes investment, legal, financial, accounting or tax advice and does not confirm that a strategy is suitable or appropriate to your individual circumstances or otherwise constitutes a personal recommendation to you. Recipients should always seek independent tax and legal advice. Goodbody does not guarantee the reliability of the information provided. Goodbody, its servants or agents accept no responsibility for any loss arising from any action taken or not taken by anyone using this material.
SUCCESSION AND BUSINESS EXIT PLANNING
EXIT STAGE RIGHT
May 11: Pre-sale structuring: Planning for a tax efficient exit
June 15: Exit stories: Case studies and succession stories
A series of upcoming virtual events on Succession planning
57%
intend to exit within 5 years, yet just 15% have a formal succession plan
in place
was most important driver of exit decision making
TAX
have a leadership succession management plan
have never done a personal financial plan
intend to selL their business
while
37%
52%
23%
Register for our event series (running from April through to year end) to help you get exit ready, whether your exit is around the corner or much further way at
www.goodbody.ie/business-owners
Just as a well executed exit or entrance can transform a theatrical performance, the world of business demands careful planning when it comes to transitions. Exiting a successful venture shares parallels with stepping off a stage, demanding deliberate consideration rather than leaving it to fate.
How you exit a successful commercial entity is vital. This isn’t something you can leave to chance – it must be done in a smart, considered way to ensure success.
In the cut and thrust of day-to-day commerce, it’s understandable that many business owners put off the task of exit strategising, but sitting down and planning ahead will help reap rewards when it comes to maximising return on investment - as well as offering peace of mind for the future.
Goodbody and AIB Capital Markets recently collaborated on a survey of Irish business owners to discover what exit planning, if any, they had in place. It showed that:
Exiting your business is one of the most important fundamental processes that
you will ever complete
WATCH
THE VIDEO
— As You Like It, Act 2, Scene 7
All the world's a stage, And all the men and women merely players;
They have their exits and their entrances,
And one man in his time plays many parts.
Less than
HALF
wish to pass
on to family
NEW RULES TO MAXIMISE RETURN
A common mistake business owners tend to make is to confuse corporate wealth with personal wealth. Owning shares in a successful and valuable entity does not make you wealthy – company funds have to be transferred to you. Obviously, selling shares is the most efficient way to extract this value. Therefore, minimising the tax implications of doing so is the basis of all successful exit strategies.
Entrepreneurial relief can deliver €1 million efficiently; retirement relief will give a minimum of €750,000; termination payments can permit up to €200,000 to be paid tax-free and a further €2 million can be extracted via pensions.
Planning in advance is critical and requires a combination of taxation, investment, corporate wealth management and pension expertise.
A TAX-EFFICIENT EXIT
If you are considering your own exit strategy - and ways in which you can maximise remuneration without necessarily undertaking the sale of your business - talk to Goodbody’s qualified investment advisors who can take you through the range of options.
To book a complimentary consultation with our Succession Advisory team about any aspect of a potential transition, simply complete this short form and we’ll be in touch.
Business owners with a broader interest in the area of exit strategy planning can also sign up for a series of live and virtual events, featuring the Goodbody tax and pensions team, which take place nationwide throughout the Autumn. To register your interest, go to www.goodbody.ie/business-owners.
EXPERT ADVICE
Goodbody Stockbrokers UC, trading as Goodbody, is regulated by the Central Bank of Ireland and Goodbody Stockbrokers UC is authorised and regulated in the United Kingdom by the Financial Conduct Authority. Goodbody is a member of Euronext Dublin and the London Stock Exchange. Goodbody is a member of the group of companies headed by AIB Group plc.
SPONSORED CONTENT
Just as a well executed exit or entrance can transform a theatrical performance, the world of business demands careful planning when it comes to transitions. Exiting a successful venture shares parallels with stepping off a stage, demanding deliberate consideration rather than leaving it to fate.
How you exit a successful commercial entity is vital. This isn’t something you can leave to chance – it must be done in a smart, considered way to ensure success.
In the cut and thrust of day-to-day commerce, it’s understandable that many business owners put off the task of exit strategising, but sitting down and planning ahead will help reap rewards when it comes to maximising return on investment - as well as offering peace of mind for the future.
Goodbody and AIB Capital Markets recently collaborated on a survey of Irish business owners to discover what exit planning, if any, they had in place. It showed that:
intend to exit within 5 years, yet just 15% have a formal succession plan
in place
was most important driver of exit decision making
have a leadership succession management plan
intend to selL their business
while
TAX
57%
intend to exit within 5 years, yet just 15% have a formal succession plan in place
37%
37%
How you exit a successful commercial entity is vital. This isn’t something you can leave to chance – it must be done in a smart, considered way to ensure success.
In the cut and thrust of day-to-day commerce, it’s understandable that many business owners put off the task of exit strategising, but sitting down and planning ahead will help reap rewards when it comes to maximising return on investment - as well as offering peace of mind for the future.
Goodbody and AIB Capital Markets recently collaborated on a survey of Irish business owners to discover what exit planning, if any, they had in place. It showed that:
When owners consider the prospect of exit they often think exclusively of a business sale, but other extraction tools are available. Changes in the Finance Act 2022 also offer business owners new potential benefits.
The new rules permit substantial further funding through Personal Retirement Savings Accounts (PRSAs) for business owners and family members who are remunerated for their service to the business.
Salaries, bonuses and directors’ fees are the most straightforward method of paying owners, but dividends aren’t usually as attractive given they are subject to dividend withholding tax and cannot be deducted against corporation tax.