A strong succession plan can help ensure your business thrives for generations.
Building a successful and thriving business takes a lot of time and a great deal of effort, particularly in the early years. But among all the growth strategies, marketing plans and brand awareness, there’s one important piece of the business jigsaw that’s often overlooked – a succession plan.
While you may have been the driving force behind your company’s achievements, nothing lasts forever. The question faced by business owners is who the next generation of leadership should be – family, a professional CEO to replace them as the key figure, or perhaps it’s time to pass the business on in its entirety.
When it comes to business succession planning, there’s no ‘one-size-fits-all’ solution as every business is different. Unfortunately, this often means that no formal plan is put in place and when the time comes for the business to be handed over, complicated situations can arise.
The key to the successful transfer of a business, or wealth, is to start early, ideally two years ahead. Don’t delay the planning until the point where an exit strategy has to be implemented. Waiting until the last minute could result in rushed decisions and have a fundamental impact on the future of the business.
Having a succession plan in place long before it is needed means that you have time to work with whoever will eventually take over the helm of the company. It provides an opportunity to pass on years of knowledge and instil a similar ethos and vision for the long-term future of the business.
When the next generation of a family is keen to take the business forward, it’s essential to start planning for a smooth transition.
This involves identifying the key skills and qualities required to lead the business and developing a training and development plan to ensure the heirs are equipped to take on the challenge. It’s also crucial to consider the tax implications of passing on the business to family members by seeking advice from a tax specialist.
Passing ownership to the next generation through a trust entity can provide a degree of control for the current owners, while allowing the future owners to take the reins. Engaging heirs early in the management of the business can help ensure a seamless transition and the continued success of the business.
“If you’re planning to pass on your shares to your children, it’s important to seek advice,” says Daniel Cordery, a relationship manager at RBC Private Wealth in the British Isles. “The current business owners need to be aware that if they’re going to be exiting any shareholding at any point of time, there’ll be a tax charge associated with doing so,” Cordery says.
As the business grows, it may be necessary to hire a professional management team to help take the company to the next level. This can involve you, as current owner, shifting to the role of chairperson, allowing the new management team to take charge and providing you greater freedom from your involvement in the day-to-day decisions. This transition is essential for the long-term success of the company.
The incoming owners may decide they would rather not take the business forward. In this case, a formal process should be undertaken to ready the business for sale and identify the best acquirer. This can include options such as:
For any business owner that has created a successful company over time, having an emotional interest in its continued success is natural and to be expected.
“There’s an emotional value to owning and then gifting away a business,” Cordery says. “While there are complicated points to be addressed, a business owner usually knows when they feel the time is right to allow a greater distance between themselves and the company they’ve created.”
He adds, “Once this feeling is in place it’s time to begin the thoughtful exercise of planning the next chapter for the company.”
This article was updated in Sept. 2025.
Please note: This does not constitute tax or legal advice. Tax treatment depends on the individual circumstances of each client and may be subject to change in the future. You should always check the tax implications with an accountant or tax specialist.
We want to talk about your financial future.
This publication has been issued by RBC’s Wealth Management international division in the United Kingdom and the Channel Islands which is comprised of an international network of RBC® companies located in these jurisdictions and includes RBC Europe Limited and Royal Bank of Canada (Channel Islands) Limited. You should carefully read any risk warnings or regulatory disclosures in this publication or in any other literature accompanying this publication or transmitted to you by RBC’s Wealth Management international division.
This publication has been compiled from sources believed to be reliable, but no representation or warranty, express or implied is made to its accuracy, completeness or correctness. All opinions and estimates contained in this report are judgements as of the date of this report, are subject to change without notice and are provided in good faith but without legal responsibility. This report is not an offer to sell or a solicitation of an offer to buy any securities. Past performance is not a guide to future performance, the value of investments and income arising can go down, future returns are not guaranteed, and an investor may not get back the amount originally invested. Countries throughout the world have their own laws regulating the types of securities and other investment products and services which may be offered to their residents, as well as the process for doing so. As a result, any securities or services discussed in this report may not be eligible for sale in some jurisdictions. This report is not, and under no circumstances should be construed as, a solicitation to act as a securities broker or dealer in any jurisdiction by any person or company that is not legally permitted to carry on the business of a securities broker or dealer in that jurisdiction. Nothing in this report constitutes legal, accounting or tax advice or individually tailored investment advice.
This material is prepared for general circulation and does not have regard to the particular circumstances or needs of any specific person who may read it. The investments or services contained in this report may not be suitable for you and it is recommended that you consult an independent investment advisor if you are in doubt about the suitability of such investments or services. To the full extent permitted by law none of the entities which comprise the international division of RBC Wealth Management nor any of their affiliates, nor any other person, accepts any liability whatsoever for any direct or consequential loss arising from any use of this report or the information contained herein. No matter contained in this document may be reproduced or copied by any means without the prior consent of RBC Wealth Management.
Clients of RBC Europe Limited may be entitled to compensation from the UK Financial Services Compensation Scheme (FSCS) if it cannot meet its obligations. This depends on the type of business and the circumstances of the claim. Most types of investment business are covered for up to a total of £85,000. For further information about the compensation provided by the FSCS scheme (including the amounts covered and eligibility to claim) please refer to the FSCS website FSCS.org.uk. Please note only compensation related queries should be directed to the FSCS. Royal Bank of Canada (Channel Islands) Limited is not covered by the UK Financial Services Compensation Scheme.
RBC Europe Limited is registered in England and Wales with company number 995939. Its registered office is 100 Bishopsgate, London EC2N 4AA. RBC Europe Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.
Royal Bank of Canada (Channel Islands) Limited (“the Bank”) is regulated by the Jersey Financial Services Commission in the conduct of deposit taking, fund services and investment business in Jersey. The Bank’s general terms and conditions are updated from time to time and can be found at https://www.rbcwealthmanagement.com/en-eu/terms-and-conditions. Registered office: Gaspé House, 66-72 Esplanade, St. Helier, Jersey JE2 3QT, Channel Islands. Deposits made with Royal Bank of Canada (Channel Islands) Limited in Jersey are not covered by the UK Financial Services Compensation Scheme. Royal Bank of Canada (Channel Islands) Limited is a participant in the Jersey Bank Depositors Compensation Scheme. The Scheme offers protection for ‘eligible deposits’ up to £50,000 per individual claimant, subject to certain limitations. The maximum total amount of compensation is capped at £100,000,000 in any 5 year period. Full details of the Scheme and banking groups covered are available on the Government of Jersey’s website http://www.gov.je/dcs or on request.
Investment services offered by the Bank are not covered by an investor compensation scheme as there is currently no such scheme operating in Jersey, however ‘eligible deposits’ held pursuant to investment services may be protected under the Bank Depositors Compensation Scheme described above – for more information see the Bank’s general terms and conditions. Some of the products that the Bank might recommend to you could be registered overseas and may be covered by a local compensation scheme. Your investment counsellor will provide you with the details of any overseas compensation schemes (where applicable) at the time of making an investment recommendation.
Copies of the latest audited accounts are available upon request from the registered office. ® / ™ Trademark(s) of Royal Bank of Canada. Used under licence.