Our partner Doug Hartkorn participated in a Portfolio Management Association of Canada (PMAC) event on Succession Planning & Execution: Successfully Transitioning Full or Partial Ownership, Internally & To Third Parties. Doug was one of the expert panelists on the panel discussion on Legal, Tax, Valuation and other Transition Considerations.
Doug's role on the panel was to discuss business and tax issues in internal succession (i.e. employees becoming new owners). He discussed issues such as who is diluting, how they pay, how to deal with 'sweat equity', ensure capital gains treatment, and how sellers may utilize their small business capital gains exemption.
Doug appeared on the panel with other specialists including a lawyer who discussed regulatory issues, a consultant and also a transition planner, along with a moderator who directed questions to the panelists.
The panel of specialists was then followed by a CEO panel. They provided a list of questions that business owners should think about, such as:
- How can you protect the independence of the firm?
- What would be the best outcome for employees & clients?
- Where do you see yourself ?
- What do you want your firm's legacy to be?
- Do you have a game plan, i.e. resources/accountability/measurement?
- How you will will communicate among stakeholders (goals/objectives)?
- Doug felt that the take-away from the seminar was that with succession planning, "if you're doing it right you never stop planning - from the top of the organization right down to the front desk. You should always be looking to build; it's an ongoing process."
Shimmerman Penn's Investment Management sector group is an affiliate member of PMAC. Established in 1952, Portfolio Management Association of Canada (PMAC) is a forum for Investment Management Firms to share best practices and industry knowledge.
