Steps to Dividing Your Business Before Retirement

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  • Plan an exit strategy for your business before retirement, including who will take over and your involvement in the transfer. 
  • Get professional advice from a business lawyer, accountant, and financial planner to ensure everything is handled properly. 
  • Update your documents accordingly and ensure taxes are paid and liabilities and obligations are addressed. 
  • Transfer ownership, stock certificates, and any assets related to the business to the new owners.

If you’re nearing retirement age and own a business, planning for what will happen when stepping away from the company is important. Deciding how to divide your business before retiring can be tricky, but there are some steps that you can take to make the process as smooth and seamless as possible. Here’s a look at the essential steps for dividing your business before retirement.

Create an Exit Plan

The first step is creating an exit plan. Before you begin dividing your business, you need to decide what you want the result of this process to look like. To create an effective exit plan, ask yourself these:

  • What will happen with the company once you retire?
  • Do you plan on selling it or passing it down to your family?
  • How much do you want to be involved in the transfer of ownership?
  • Answering these questions can help shape the rest of the process.

Get Professional Advice

The next step is getting professional advice. You must get experienced guidance when deciding how to split up your business before retirement. Here are the essential professionals that will need to be consulted:

Business Lawyer

A lawyer specializing in business law can help you draw up the legal documents necessary to divide up your business. They will also be able to offer advice on handling any tax implications that come with selling or transferring ownership of a business. Additionally, a business lawyer can advise on any legal issues arising as you split your company.


Having an accountant on hand is key when dividing a business. Not only will they be able to help figure out any financial implications of selling parts of the company, but they will also be able to help navigate any tax regulations that come with the process.

Financial Planner

A financial planner can help create a plan for how you want to invest your money once you retire. This person will be able to assess your retirement goals and work with you to decide what steps need to happen to reach those goals.

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Update Your Documents

Once everything has been planned, it’s time to update your documents accordingly. Organizing your paperwork and ensuring everything is accounted for will make the rest of the process much smoother. This includes the following:

Business Plan

Your business plan should reflect the changes you are making to your company due to your retirement. This should include updated financial goals, a revised organizational structure, and any other changes that you think are necessary. This will help ensure everything is going according to plan.

Tax Records

Ensure that your tax records are current, which will be essential when it comes time to divide the business. This means ensuring that all taxes have been paid and that there is proof of any deductions taken throughout the year.


If you are selling or transferring ownership of your business, you need to update your contracts accordingly. This includes ensuring that any liabilities or obligations are addressed in the documents so they don’t come back to haunt you later.

Transfer Ownership and Assets

Once everything has been agreed upon and documented, it’s time to transfer ownership and assets from yourself to whoever will take over after your retirement (whether a new owner or a family member). This could involve the following:

Transferring Stock Certificates

Stock certificates are legally binding documents that prove ownership of company shares. If there is more than one business owner, each person must have their own stock certificate. This means you must transfer the certificates to officially divide the company.

Transferring Assets

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It’s also important to ensure that any assets related to your business are transferred properly. This could involve transferring real estate, equipment, or other items of value. Make sure you plan how these assets will be divided before you start the process.

Close Out Accounts and Taxes

Finally, ensuring all your accounts are closed properly and that any taxes due are taken care of is important. This includes shutting down business bank accounts, filing final tax returns, and closing any credit card or loan accounts related to the business. Taking care of these items will help ensure you don’t run into financial or legal issues after retirement.

Retirement is a big transition, and planning how your business will be divided before you step away is important. Taking the time to plan out this process now will help ensure peace of mind in retirement down the road. With careful planning and the help of experienced professionals, you can divide your business before retirement with minimal stress.

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