Why Is Developing a Management Succession Plan So Important to the Founder

question 81

Essay

Why is developing a management succession plan so important to the founder of a family business? Identify and briefly describe the steps of a successful plan.

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Definitions:

New Equity

Capital raised by a company through the issuance of new shares to investors, leading to ownership dilution for existing shareholders.

Marginal Provincial Tax Rate

The amount of tax payable on an additional dollar of income, specific to a province's taxation system.

Provincial Tax Rates

The tax rates imposed by a province or territory on income, property, and goods and services, which vary by jurisdiction.

Cash Flow

The comprehensive measure of cash flow into and out of a business operation, crucially shaping its financial liquidity.