When your parent established the small business that supported your Tennessee family for years, you may have had many conversations about you taking over the company when the time came. Perhaps your parent never defined what that time would be, but you assumed you would take over when your loved one decided to retire.

Like many business owners, your parent may have done little to prepare for this moment and may have figured you would simply step into the role at some point in the future. However, if your parent passed away without leaving a plan of succession or an estate plan, you may feel overwhelmed and uncertain about what lies ahead for the family business.

Examine all the parts

Inheriting a business is not as simple as taking your parent's place behind a desk or counter. At the very least, there is likely to be a great deal about the business that you do not understand. Your first task is to obtain that information, especially the following details:

  • A business plan
  • A list of vendors and clients
  • Financial records, including profit and loss reports for the business
  • Bank statements
  • Any licenses and permits required by the industry
  • Tax returns from the past three years
  • A list of debts
  • Information about the business's insurance policies

You will need to gather and evaluate this and other information as quickly as possible since you may have a limited time to make decisions. Meanwhile, you should communicate with your employees, suppliers and clients to maintain the positive and transparent relationships your parent established.

Get help before you make any decisions

Once you have a thorough understanding of the state of the business, you can make your decision about what to do next. You must take an honest look at the situation to determine your next move. You may find it is necessary to seek a partner who can share the burden, or the circumstances may force you to sell the company.

Since you have many decisions to make, you want to be certain you understand your options and the laws related to the industry and the transfer of such a business. You will also want frank advice about your options. At such a time, you would be wise to enlist the services of an attorney who can be a solid resource whether you dissolve the company or elect to keep the business running.

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