When Formulating a Business Succession Plan the Owner Should Determine

question 9

Multiple Choice

When formulating a Business Succession Plan the owner should determine several things.Which of the following is not considered?

• A)Should ownership be held by family members only?
• B)Are the owner and the spouse on the same page with respect to continuing the business?
• C)Should the business be sold to pay inheritance taxes?
• D)Does the owner want the business ownership to pass directly to the heirs or in trust?

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Definitions:

Residual Value

The estimated value of an asset at the end of its useful life.

Lease Terms

The conditions under which a lease will be granted, including duration, payment intervals, fees, restrictions, and penalties.

Lease Obligations

Financial commitments a company incurs as a result of entering into a lease agreement for property, plant, or equipment.

Lessee

A person or entity that leases an asset from another party, known as the lessor.