Virgin Islands Law Blog

Virgin Islands Law Blog

U.S. Virgin Islands law & politics

C Corps and S Corps Have Different Tax Implications

Posted in Corporate & Financial Services

Whenever a new business is founded, the entrepreneur must decide what type of company it will operate us. Two of the most common choices are C Corps and S Corps—each of which has its own advantages. The choice you make depends largely on how you intend to run and structure your business.

Similarities of C Corps and S Corps

In both structures, you are typically required to pay a minimum franchise tax and file an annual statement of officers, along with a nominal fee. The corporation’s principals are expected to hold regular board of director meetings (at least annually, if not more often).

All books and bank accounts in both C Corps and S Corps are expected to remain separate from personal records and books. This is because the corporation is a formal business entity, and personal transactions must stay separate in accordance with federal law.

All owners of the company who also work for it are required to be on payroll, and payroll taxes must be withheld and matched with reasonable rates of pay. If the IRS ends up auditing the corporation and discovers this rule is violated, it will likely collect penalties and interest, in addition to payroll taxes owed.

Differences between C Corps and S Corps

Although there are plenty of similarities between the two models, there are also a number of different tax implications of which business owners should be aware. Here are a few noteworthy examples:

  • C Corps file standalone tax returns and ultimately pay their taxes at a corporate level, with losses either carried backward or forward. C Corps may be taxed at a maximum rate of 35 percent. S Corps, on the other hand, do file a tax return, but loss or profit passes through Form 1120S K-1 to an individual income tax return. Ultimately, tax liability and taxes are paid at the individual level. The maximum tax rate here is 39.6 percent.
  • C Corp owners are unable to withdraw funds in the manner of a partner in a partnership or a sole proprietor. Any funds withdrawn are subject to double taxation, unless they are expense reimbursements or loan repayments. S Corp owners are allowed to withdraw funds against profit, as long as reasonable compensation is paid through wages.
  • C Corp owners have more fringe benefits, such as disability insurance and life insurance, compared to S Corp owners.
  • C Corp owners are required to pay estimated tax based on the corporation’s profits. S Corp owners, conversely, are potentially subject to estimated tax depending on state rules. However, S Corps pay no federal income tax.

For more information on the similarities and differences of these two structures and the advantages each provides, work with an experienced business law attorney today.

 

Steven K. Hardy is Chair of the BoltNagi Corporate, Tax and Estate Planning Practice Group.  BoltNagi is a well-established and widely respected business and corporate law firm serving clients throughout the U.S. Virgin Islands.

What You Should Know if You Owe Money to the VI Bureau of Internal Revenue

Posted in Tax & Estate Planning

Here is my second stock photo attempt, just in time for tax season.  This one didn't require any expensive props either  but I did have to use my son's glue stick to hold the sheets together. Feel free to use this image, just link to www.SeniorLiving.Org

Whenever you or your business owes money to the Virgin Islands Bureau of Internal Revenue (BIR), it is important to ensure you comply with all federal and territorial laws to avoid significant legal complications. Remember, there’s no chance that you will be able to outrun the BIR, so it is not worth trying.

The following is some sage advice having worked with the BIR over the past 30 years to keep in mind when the BIR comes to collect outstanding taxes:

  • Never ignore official BIR communications: Many people think that just because mail from the BIR is automated they can avoid answering and no one will be any the wiser. This is a mistake. You cannot avoid the BIR, and if you do not respond, you could potentially face interest, fines and other penalties.
  • Never file with the BIR, that you do not retain a date stamped copy:  Without fail, the BIR does not retain good records.  Often times, it is your word against theirs so it well advised that you submit all filings in person and retain a date stamped copy.  Do not depend on mailing filings.  If necessary, work with a local law firm or accountant so that they may submit same and provide you with a date stamped copy.
  • Never go to BIR meetings by yourself: You should always have legal representation when you meet with the BIR. A tax attorney will look out for your rights and help you reach significantly better outcomes.
  • Speak with a tax expert: Before you meet with the BIR, arrange a meeting with a tax expert who can help you prepare. This expert should provide an idea of everything the BIR will tell or ask you, how you should respond and how to avoid further complications.
  • The BIR does make mistakes: If you have been keeping good track of your tax payments and believe something in the paperwork sent to you by the BIR doesn’t look right, theirs is quite often a chance a mistake was made. The BIR does make mistakes from time to time, so if you believe this is the case, work to get the mistake corrected as soon as possible.
  • Due process applies to BIR proceedings: Due process is not just a word used in court—it also applies to BIR collections. For example, the BIR cannot legally take over your bank account, garnish your wages or repossess any of your property without prior written notice and without giving you an opportunity to challenge any of its claims. All collection activity must be paused if there are pending challenges to BIR claims. In some situations, you may actually take the BIR to court.
  • If you owe, there are options: The BIR won’t have you sent to jail because you cannot pay—although it may seek criminal charges if you are attempting to evade taxes. If you are unable to make your payments in full, there are several strategies. A hardship suspension allows you to temporarily suspend your taxes until you are better able to pay. You could arrange a payment plan or file for bankruptcy—although this strategy is certainly not for everyone. Finally, you could attempt to come to an agreement with the BIR, depending on your situation.

For further guidance on this and other tax issues, work with a skilled tax planning attorney right away.

Tom Bolt is Chair of the BoltNagi Government Relations Practice Group.  BoltNagi is a widely respected and well-established government relations and tax planning law firm serving clients throughout the U.S. Virgin Islands.

VIRGIN ISLANDS MINIMUM WAGE INCREASES TO $8.35 PER HOUR

Posted in Labor & Employment

Minimum-Wage-ImageEarlier this year, the Legislature of the Virgin Islands approved an increase of the minimum wage in the territory to $8.35 per hour, pursuant to Act No.7856, which by June 1, 2018 will increase up to $10.50 per hour.

The $8.35 increase takes into effect on June 21, 2016.  Aside from the initial minimum wage increase, the minimum wage will increase again on June 1, 2017 to $9.50 and $10.50 per hour on June 1, 2018.

Business owners across the U.S. Virgin Islands are likely wondering how increases in minimum wages over the next couple of years will affect their business. The best basis for comparison is to look at states that have also recently hiked their minimum wage rates.

Case studies across the United States

The biggest story in terms of minimum wage rate hikes over the past couple years came in July 2015, when Governor Andrew Cuomo of New York announced the state would implement a plan to increase the minimum wage for employees in the foodservice industry to $15 an hour. The increases will be implemented gradually over the course of the next few years. As those increases are still in progress, there is not yet a clear picture of what impact they have had on the state’s economy.

Other states, however, have approved smaller minimum wage hikes more comparable to what’s happening in the U.S. Virgin Islands. In 2014 and 2015, the following states increased their minimum wages: Alaska, Arkansas, Connecticut, Delaware, Hawaii, Maryland, Massachusetts, Michigan, Minnesota, Nebraska, Rhode Island, South Dakota, Vermont, West Virginia and the District of Columbia. D.C. was the only place to raise the minimum wage to more than $10 an hour (it is now $10.50).

A study of raised minimum wages performed by the Congressional Budget Office analyzed the impact of raising minimum wage to $9 and $10.10. A state raising the minimum wage to $10.10 was more likely to experience a drastic reduction of workers, but low-wage workers across the country would receive much greater gains in their earnings every week.

To that end, as a business owner, it is important to consider all of the possibilities that the ongoing minimum wage rate hikes will bring and to be prepared for them. If you need more information and guidance on your obligations, consult a trusted labor and employment attorney.

Attorney Ravi S. Nagi chairs the BoltNagi, PC Labor & Employment Practice Group, a widely respected and established labor and employment law firm serving clients throughout the U.S. Virgin Islands.

 

The Requirements for Recording a Deed Executed in a Foreign Country

Posted in Real Estate, Tax & Estate Planning

NYS-Notary-SealGrantors of U.S. Virgin Islands real property executing a deed in a foreign country may face additional legal hurdles in conveying property. Although the basic steps remain the same as for a deed executed within the Territory, there are important differences that should be noted.  These include: (i) the formalities that must be present during the execution in order for there to be a valid transfer of title; (ii) what persons/officers are eligible to take the acknowledge of the execution; (iii) the form of the certificate of acknowledgment; and (iv) how the authority of such person/office taking the acknowledgment is authenticated.

While Title 28, Section 42, subsection (a), Virgin Islands Code, provides that a deed within the U.S. Virgin Islands must be executed in the presence of two (2) witnesses who shall subscribe their names on it, subsection (b) of that Section provides that deeds in foreign countries conveying title to real property in the U.S. Virgin Islands should be executed in accordance with the laws of the foreign country. Although requirements of foreign countries may often be more relaxed than the two-witness requirement in the Territory, this is not always the case.  Accordingly, it is critical to check the law of that country to ensure all requirements are met.

Although there is nothing to legally prevent a grantor from executing a deed in a foreign country and then returning to the U.S. Virgin Islands to acknowledge execution of the deed (i.e., the notarial act), as a practical matter however, the execution and acknowledgment are always done together. Accordingly, the next step is to ensure that the acknowledgment in the foreign country meets the requirements of the Uniform Acknowledgment Act, which was adopted in the U.S. Virgin Islands in 1981.  Title 28, Section 82, Virgin Islands code sets forth a list of persons/officers eligible to take an acknowledgment in a foreign country, which includes judges, clerks, certain personnel of the U.S. Department of State, and, most importantly, notary publics authorized under the law of the foreign country.  Just as if the deed was being executed in the U.S. Virgin Islands, the grantor shall appear before the officer and acknowledge that he executed the deed.  The officer must then certify that: (i) the grantor appeared before him and acknowledged he executed the deed and (ii) that he knows or has satisfactory evidence that the grantor appearing before him is the same person that is the grantor in the deed.  The officer will then prepare a written certification.  Virgin Islands law allows the form of this written certification to be the same as that used for acknowledgments within the Virgin Islands or a form approved by the laws of the country in which the acknowledgment is taken.  Finally, the authenticity of the officer taking the acknowledgment must be demonstrated.  Depending on who the officer is (e.g., judge, notary, etc.), the requirements vary.  This, however, is usually accomplished by the officer affixing his seal to the written acknowledgment attached to the deed or affixing his signature and listing his rank and title.

When an acknowledgment of a deed execution is taken in a country that is a signatory to the Convention Abolishing the Requirement of Legalisation for Foreign Public Documents (i.e., Apostile Convention), BoltNagi PC believes it is good practice for the grantor to have the authenticity of the notarial act certified in accordance with the Convention and have the Apostile certificate attached to the acknowledged deed.

Once a deed to U.S. Virgin Islands real property has been properly executed and acknowledged in a foreign country, the requirements for recording the deed in the Territory are the same as for those executed and acknowledged in the Territory. For all parcels of land (vs. condominiums and timeshare units), the Cadastral Section of the Tax Assessor’s Office must conduct a boundary attestation and certify the correctness of the legal description of the real property being conveyed by virtue of the deed  A current tax clearance letter issued by the Office of the Tax Collector, certifying all ad valorem tax liabilites are current, must be attached to the deed.  Unless eligible for an exception, the transfer tax must be paid and the stamps affixed.  Documents transmitted to the Recorder of Deeds with proper recording fees are date-stamped when received and kept for processing. Upon completion, documents are returned to customers by mail or held for pick up. The complete process takes approximately one week.

The transfer tax stamps shall be affixed to deeds executed outside the U.S. Virgin Islands within thirty (30) days from the date of arrival within the Territory. Arrival date shall be endorsed on the document and the date verified by affidavit (Title 33, Section 127). The penalty for any document not stamped within the proper time is twice the stamp tax not to exceed $100 (Title 33, Section 129).

For more information about recording a deed executed in a foreign country, work with an experienced real estate attorney.

 

Steven K. Hardy is Chair of the BoltNagi Real Estate and Financial Services Practice Group. BoltNagi is a well-established and widely respected real estate  law firm assisting clients regarding U.S. Virgin Islands real estate and real estate development.

Gov. Mapp Outlines Economic Development Initiatives for U.S. Virgin Islands

Posted in Community Affairs, Government Relations

Governor Mapp at Transfer Day CeremonyU.S. Virgin Islands Governor Kenneth E. Mapp recently held a press conference at Government House, where he discussed a number of economic development initiatives.

Tourism has long been the single-largest driver of the economy in the U.S. Virgin Islands, and the industry has fully recovered since the Great Recession. Mapp emphasized the importance of the tourism industry to the economy in the territory, and said he is reviewing a variety of initiatives that may help boost the industry even further.

The following are a few of the primary issues the governor discussed related to tourism and the territory’s overall economy:

Five-year plan

The Commission of Tourism has begun updating its own five-year tourism plan, which it developed alongside the Office of the Governor. The plan will help create a more sustainable future for the tourism through research, data collection and strategic visioning sessions.

New resort on Water Island

Governor Mapp also announced a brand-new resort on Water Island, which will make that particular island more attractive for tourists. It is the smallest and newest addition to the U.S. Virgin Islands, having joined the territory officially in 1996. However, it has not had a whole lot of tourist attention other than day trips and very few visitors who stay overnight at a small campground on the island.

Tourism on Water Island plummeted after Hurricane Hugo destroyed its Sea Cliff Resort in 1989, and has never truly recovered. This new resort, however, should attract visitors to the islands like never before.

Organizational alliances

Big names in the U.S. Virgin Islands tourism industry have a lot to gain by working alongside other organizations. An alliance between ARDA-Caribbean, ARDA-ROC and the U.S. Virgin Islands Hotel and Tourism Association, for example, helped to get the territory through the recession and steadily build up the industry as a whole afterward. The governor said he believes such alliances are going to continue to be a significant asset to the industry moving forward.

Focus on the natural

Another economic initiative relating to the tourist industry is to continue to focus on the natural attractions located throughout the territory. A beautiful year-round climate, gorgeous water and an abundance of recreational activities have given the U.S. Virgin Islands a reputation for being something of a paradise. Continuing to provide opportunities for snorkeling, diving, kayaking, deep-sea fishing and exploration will be a major facet of the tourism industry as it continues to build on recent successes.

U.S. Virgin Islands officials don’t appear to have any shortage of ideas when it comes to building on the recent growth the tourism industry—and the economy as a whole—have experienced.

 

Tom Bolt is Managing Attorney for BoltNagi PC, a respected and well-established government relations law firm serving individuals, businesses and organizations throughout the U.S. Virgin Islands.

AB Trusts Can Significantly Reduce Your Tax Burden

Posted in Tax & Estate Planning

AB TrustIf you’re married and would like to get the most out of your joint federal estate tax exemptions, one effective option is an AB trust. There is a common misconception that these types of trusts only benefit people who have large, valuable estates, but in actuality anyone who could owe estate tax may benefit from these types of trusts.

The primary benefit of an AB trust is that it helps avoid the estate being taxed before assets and property are passed on to beneficiaries. Each spouse places his or her property into an irrevocable trust. When the first spouse passes away, the beneficiaries of the trust receive that individual’s property to use it for the benefit of the surviving spouse.

The surviving spouse, meanwhile, does not own that property, but can use it and even spend principal in some cases. Once he or she dies, all of the property and rights related to the trust pass down in full to the surviving beneficiaries. Because the trust assets are technically owned by the trust and not the spouse, they are not subject to estate taxes.

Disadvantages associated with AB trusts

Clearly, the creation of an AB trust has some benefits, especially if you believe estate taxes could be a challenge. However, there are a few issues you will want to consider before deciding to go with an AB trust.

First and foremost, AB trusts are irrevocable. If a spouse dies, there can no longer be any changes to the trust. It has become a legally binding agreement. This could potentially cause difficulties for the surviving spouse and/or the trust beneficiaries, and could even create friction between the various parties involved.

Settling and distributing assets from an AB trust can also be an expensive and challenging process. You will definitely need the assistance of a skilled estate planning attorney, as there is a great deal of paperwork and bookkeeping involved. You may also need to work with an accountant to determine how to best distribute assets between the deceased spouse’s irrevocable trust and the surviving spouse’s living trust.

Every time you decide to distribute property from a trust, there are going to be tax issues you have to address. Having skilled legal and financial professionals working with you ensures you fully understand the implications of these tax issues.

To that end, while AB trusts are not necessarily right for everyone, they do pose some significant advantages in the right situations. If you are looking for more guidance on whether an AB trust is right for you and your spouse, speak with an experienced estate planning attorney.

 

Steve Hardy is Chair of BoltNag’s Corporate, Tax and Estate Planning Practice Group, BoltNagi is a widely respected and established estate planning law firm serving clients throughout the U.S. Virgin Islands.

How the ‘One Person-One Vote’ Supreme Court Ruling Will Affect Virgin Isalnds Senate Elections

Posted in Community Affairs, Government Relations

Photo courtesy of flickr/Vox EfxBack in April, the U.S. Supreme Court ruled unanimously that states were allowed to count all of its residents—and not just those eligible to vote—when drawing their elective districts. The decision was a significant statement on the principle of “one person, one vote,” and marked the first time the Supreme Court had ever ruled on the issue directly.

The case in question was Evenwel v. Abbot, which involved two voters in Texas who were challenging how the state apportions its state senate districts. Evenwel argued that counting people ineligible to vote, such as children, convicted felons and the mentally disabled, diluted political power in suburban and rural areas, thereby violating the 14th Amendment to the U.S. Constitution.

Abbot made the exact opposite argument: that failing to count all persons violated their right to elected representation.

Political ramifications at stake

Generally, the court’s ruling to reject Evenwel’s argument could intensify political power in areas where there are large numbers of people who cannot vote. For the most part, these are urban areas that tend to support Democrats. Had the court ruled in the opposite direction, it would have strengthened power in more rural areas of the United States, where Republicans are more likely to receive support.

It is worth noting that the Supreme Court’s ruling does not mean that states and territories must use total population when drawing their districts, but rather that it’s an option they can use. Nearly all states and territories, including the U.S. Virgin Islands, use the total population method rather than looking at eligible voters alone.

In our territory, it appears as though legislative districts will continue to be apportioned based on total population in the foreseeable future, but all eyes are on the 2020 United States Census when it is predicted that the population for the District of St. Croix will dip substantially below that for the District of St. Thomas-St. John, which could jeopardize the current even split of senators between the districts.

Mapp moves to eliminate symbol voting

In other election news directly related to the U.S. Virgin Islands, Governor Kenneth E. Mapp took action to end “symbol voting,” which had caused a great deal of confusion during the 2014 elections. The reform would remove the option to vote for candidates using symbols on computerized voting machines. In 2014, some of these machines could not be used because they did not alert voters to errors that had occurred, thereby affecting those individuals’ votes.

 

Tom Bolt is Chair of the Government Relations Practice Group at BoltNagi PC,  a widely respected and well-established law firm serving clients throughout the U.S. Virgin Islands.

Will the Puerto Rico Debt Situation Impact the US Virgin Islands?

Posted in Government Relations

DividendsOfficials in the U.S. Virgin Islands continue to watch closely the situation in Puerto Rico, where the territory has been unable to make service payments on its roughly $70 billion in debt. The crisis has become so severe that the Puerto Rican government has had to make drastic cuts to healthcare, public safety and education—and a high-ranking U.S. federal government official has warned that the situation could quickly become a humanitarian crisis, as well.

Puerto Rico defaulted on three different classes of bonds on May 1, failing to make most of a $422 million payment. The government must make an additional $2 billion in payments July 1, and it looks to be nowhere near a point at which it will be able to meet that obligation.

On May 19, Republicans in the U.S. House of Representatives finally struck a bipartisan deal with the Obama administration, possibly allowing Puerto Rico to restructure its debt in a way that resembles bankruptcy. As part of the deal, the territorial government will need to submit budget plans and financial statements to a federal panel. While the measure is promising, it’s yet to be seen whether lawmakers will actually pass it in the House—not to mention if and when the U.S. Senate may take action on its version of the bill.

It’s important to note that the government of Puerto Rico is currently not allowed to file for bankruptcy protection like an individual or business. And because it is a U.S. territory and not an independent nation, it cannot seek relief from the International Monetary Fund.

Effects on other US territories

The way Congress responds to the Puerto Rican debt crisis could have an impact on the U.S. Virgin Islands, a territory that often relies on tax-exempt bonds to help fund essential services and key infrastructure projects. This is common in U.S. territories, which often do not receive the same federal funding opportunities compared to states.

One of the proposals offered in recent months has been to allow Puerto Rico to file for what’s been referred to as “Super Chapter 9” bankruptcy. This would give the territory the ability to restructure all of its debts, including general obligation debt—something that’s not offered to states facing difficult financial circumstances.

If Super Chapter 9 were to be implemented, some worry it could negatively affect the ability of U.S. territories to offer attractive tax-exempt bonds and other incentives to the market, as there would be a new, substantial risk factor that investors would need to confront. Considering this risk, investors would likely demand higher interest rates and better returns.

While this measure could help Puerto Rico resolve its financial challenges, leaders in other U.S. territories have been vocal in their opposition to this “back door” bankruptcy option. Thus, government officials and business leaders in the U.S. Virgin Islands are keeping a close watch on the situation and how the U.S. federal government ultimately decides to handle it.

 

Tom Bolt is Chair of the Government Relations Practice Group at BoltNagi PC,  a widely respected and well-established law firm serving clients throughout the U.S. Virgin Islands.

FYI: Payroll Taxes for Your Employees are Deductible

Posted in Labor & Employment

Payroll tax picTo put it lightly, it can be difficult to keep up with all of the legal obligations you have as a small business owner.

One important thing to remember is that you must deduct payroll taxes from your employees’ salaries and wages. If you fail to do this properly, you could be forced to pay major fines—the last thing any business owner wants. How can you ensure you remain in compliance?

Business owner responsibility

You are only responsible for collecting payroll taxes from any workers who are classified as employees by the Internal Revenue Service. Although independent contractors do work for your company, they are responsible for filing their own taxes through form 1099. Therefore, you should keep up-to-date records of who works exclusively for your company and whether or not they are W2 employees. The IRS does have the ability to re-classify workers as employees and penalize business owners for not withholding those payroll taxes if the agency believes you are incorrectly paying your workers.

Some businesses may use the money they collect from payroll taxes to pay overdue bills or for use toward other purposes. However, doing this could land you in some personal financial trouble. The IRS has the right to take 100 percent of the taxes owed from a business owner’s personal assets if the agency is unable to collect payroll taxes. If this happens to you, you will not be able to get rid of your tax obligations through filing personal or business bankruptcy.

Collecting and submitting payroll taxes

The taxes collected from employees’ pay include federal, state and local income taxes, federal Medicare and Social Security taxes and state and federal unemployment taxes. The responsibility for paying these taxes is on both the employee and employer. Employers pay some of the taxes themselves, while deducting the rest from workers’ paychecks.

Employers must collect and submit these payroll taxes to the correct agency in a timely manner. Depending on the amount of payroll taxes you owe, you could be responsible for paying these taxes quarterly or monthly. You are required by the IRS to file several reports on your payroll taxes every year, including information on the amount of employees you have, the hours they work and the total amount they are getting paid.

All of this information can seem tough to understand, especially if you are a new business owner looking to bring on more employees. An experienced business and tax attorney can help you better understand payroll taxes and how you can meet your obligations, while still growing your business in a healthy, sustainable way.

Ravinder S. Nagi is Chair of the BoltNagi Labor & Employment Practice Group.  BoltNagi is a widely respected and well-established labor and employment law firm serving clients throughout the U.S. Virgin Islands.

Knowing the Best Methods for Passing on a Business to Your Heirs

Posted in Corporate & Financial Services, Tax & Estate Planning

Family Business picAfter you’ve worked so hard to build and grow your business, it’s important to know how to pass it on to your beneficiaries.

To do this, you need a sound succession plan in place that will guide the future of your business if you decide you no longer want to run it—or in the event that you pass away or become incapacitated.

Most business owners and entrepreneurs want to pass the family business down to children or grandchildren, if such an option exists. With this in mind, the following are some tips to help you create an effective business succession plan:

Begin planning early

If possible, you should begin your succession planning at least five years before you foresee yourself leaving the company. Obviously, you cannot anticipate a death or incapacitation, but if you foresee yourself departing for other ventures or retiring, then it’s best to get a head start on planning.

If you are still in the early phases of planning your business as a whole, it does not hurt to incorporate your exit strategy into your plan. Having your plan laid out in advance can give family members and employees a clear picture of what to expect should the day come when you decide to step away. This can also help you avoid unnecessary stress and hard feelings down the road.

Choose the most qualified successor

You need to be realistic about who is the most qualified person to run your business. If you have multiple children, for example, the fairest choice is not necessarily the oldest child or to split ownership equally among them. You need to choose someone you believe is best suited to follow in your footsteps and guide the company moving forward.

Keep in mind that approximately 70 percent of family businesses fail after being taken over by a child. You must appropriately train your successor or have them work in multiple areas of your company before you even consider passing on the business to them. Otherwise, the best decision might be to look outside of the family and go with a more qualified employee or partner.

Keep your family involved

Even if you are considering looking outside of the family for your successor, it’s important to keep the family notified. You do not want your loved ones to be blindsided by your decision should you suddenly pass away.

Remember, you can always amend your exit plan and succession decisions based on changing circumstances, but having a good plan in place will provide you with a great deal of peace of mind. Work with a skilled business law attorney for more information and guidance on drafting a sound succession plan for your company.

 

Steven K. Hardy is Chair of the BoltNagi Corporate, Tax and Estate Planning Practice Group.  BoltNagi is a well-respected, established business and corporate law firm serving a wide range of individuals and organizations throughout the U.S. Virgin Islands.