Abstract
Ownership transition provides for the gradual withdrawal of existing owners; allows a firm to admit new people into ownership; and assures the continuity of operations. This article describes how a firm can ease the transition from one generation of owners to the next. First the current management group must determine who will be eligible for ownership, based on technical competence and skills in areas such as marketing, human resources, project management and collecting accounts receivable. Firms must then establish a step-by-step plan for the ownership transition that addresses issues including external and internal communications regarding the transition, dealing with employees who won’t be offered ownership, financing options for stock purchases among new owners, how to determine the firm’s value, how to conduct the buyout of major stockholders and how to indoctrinate new owners to some of the responsibilities of ownership.
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