How do I get a Succession Plan online?

It's very easy to document the terms of your agreement with a free Succession Plan template from Rocket Lawyer: Make the document - Answer a few basic questions, and we will do the rest. Send and share - Go over the document with the other party or get legal advice. Sign and make it legal - Easily sign the agreement with RocketSign® electronic signatures. This method is often notably less expensive than hiring and working with a traditional lawyer.

Why is a Succession Plan important?

Succession Plans are sometimes compared to estate plans or prenuptial agreements for businesses. A Succession Plan provides a roadmap for long-term success, ensures continuity, and may span several years to optimize tax efficiency when passing the business to the next generation. This is a reason to start a plan early: even if it changes later on, or dates get pushed back, a Succession Plan can also provide protection in case of an emergency.

When is the right time to make a Succession Plan?

It’s never too early to plan for who will run your business in the future. One reason is that things don’t always go as planned: if something bad happens, like getting sick, passing away, or going through a divorce, it’s important to have a plan so the business can keep going. Plus, you can update the plan as your goals or business change. A strong Succession Plan starts with identifying and mentoring the individuals who may eventually take the lead. This could be trusted employees, family members, or friends. Training them now ensures smoother transitions later

What are the first steps a business should take to get ready to hand over leadership to someone new?

If you’re planning to pass your business on to someone else, a good first step is to take a close look at the financial health of your business. This includes determining how much your business is worth, what it owns, what it owes, and how much money it makes . Understanding these details will help you make informed decisions about the future. You should also consider what you want both personally and professionally. It can be difficult to separate what’s best for you from what’s best for the company, but doing so can help you identify the right time to step away. Your personal goals might include when you’d like to retire, how you’ll provide for your family, health insurance coverage, and how taxes will affect you. You also need to think about whether you want the business to keep growing or if you want to still be involved even after someone else is in charge or the business is acquired .

What other steps can a business take to prepare for succession?

To prepare for transferring ownership or leadership—whether to a family member or as part of a sale—businesses can take several practical steps. These may include: Incorporate or form a limited liability company . Transfer assets, such as equipment or trademarks, to the business. Transfer real property to the business. Appoint a Power of Attorney . Train the new leadership. Discuss your plan with professional advisors. A Legal Pro can explain your options along with the potential risks and consequences. A financial advisor can provide insight into tax planning, retirement preparation, and even help you build a transition budget to estimate the total cost of succession.

What decisions help make leadership changes easier?

Planning for new leadership involves making thoughtful decisions to ensure a smooth transition. Start by identifying people you trust to take on key roles in the company. If you don’t currently have someone in place, you may need to hire or train a successor. You should also consider strategies to retain current employees and maintain morale during and after the transition, even if the business is sold. Intellectual property such as copyrights, trademarks, or patents may play a role in what you choose to sell or retain. A Buy-Sell Agreement , for instance, is one legal tool that can help protect your business. It outlines who is eligible to purchase your ownership stake, how the price is determined, and what happens to your share of the business when you exit. Before any sale or leadership handoff, it’s important to know the true value of your business. If the business has unused or outdated assets, selling those first can help clarify its worth. Conducting a business valuation—an assessment of your business’s assets, liabilities, contracts, and market position—can be complex. Expert assistance can make the process easier and more accurate.

Can I change my Succession Plan?

Yes, Succession Plans can be updated. For small businesses, changes are usually straightforward. Even if a board of directors approved the original plan , it can often be revised. If you’ve started the transition process, review your Corporate Bylaws to confirm what decisions you’re still allowed to make. Choosing the right successors early can make changes easier later. While passing on a business can be complex, thoughtful planning reduces stress and improves outcomes. With a clear vision for your future and your company’s, you’ll be better prepared for a smooth transition.

Set the rules for buying or selling ownership in a company: Succession Plan

Other Names: Buy-Sell Agreement Transition Plan Leadership Continuity Plan Business Continuity Plan Exit Strategy Management Succession Strategy Leadership Development Plan Ownership Transfer Plan Key Personnel Replacement Plan Future Leadership Plan

What is a Succession Plan?

Succession Plan is another name for a Buy-Sell Agreement. A Succession Plan is a strategy that helps a business prepare for the future when an owner or key leader leaves the company. Succession plans are like a prenup for your business: they are helpful if someone retires, resigns, or becomes unable to fulfill their role. It ensures the business keeps running smoothly by identifying the right people to take over. The plan may include training employees, selecting future leaders, and outlining how roles or ownership will be transferred.

Having a Succession Plan is a smart move for any business, large or small. It sets clear expectations and designates leadership in times of change. It also builds confidence among employees and customers. With a well-crafted plan, the business can continue to grow and stay aligned with its mission—even as leadership changes. Start planning today!

When to use a Succession Plan:

You want to avoid legal disputes or confusion over business ownership in the event of a partner's divorce, bankruptcy, or legal trouble.
You want to ensure that if someone inherits part of the business due to a divorce or death, they have to sell it back to the company.
You want to prevent conflicts between employees, family members, or business partners during major transitions.
You want the business to continue operating smoothly if something unexpected happens to a key leader.
You want to keep ownership within the family or with trusted individuals, rather than risk it being sold to outsiders.

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SUCCESSION PLAN

This Succession Plan (this "Agreement") is made effective as of (the "Effective Date"), between and among (the "Company") and each of the individuals listed on the attached Schedule A (each an "Owner," and collectively, the "Owners").

The Owners own all of the outstanding of the Company (the "Units"), and desire to promote and protect their mutual interests and the interests of the Company. Therefore, the parties hereby agree as follows.

Article - Sales and Transfers


1.	General Transfer Restriction. No Owner (or any party acting on behalf of an Owner) may sell or transfer any of such Owner's Units, whether now owned or later acquired, except in accordance with the terms of this Agreement or by the written consent of the Company and all of the other Owners. Any attempted sale or transfer of any Units (or any interest in any Units) that violates the terms of this Agreement shall be void and shall not be binding upon, or recognized by, the Company or the Owners.

General Transfer Restriction. No Owner (or any party acting on behalf of an Owner) may sell or transfer any of such Owner's Units, whether now owned or later acquired, except in accordance with the terms of this Agreement or by the written consent of the Company and all of the other Owners. Any attempted sale or transfer of any Units (or any interest in any Units) that violates the terms of this Agreement shall be void and shall not be binding upon, or recognized by, the Company or the Owners.


	a.	Sale or Transfer Defined. The phrase "sale or transfer" includes any sale, pledge, encumbrance, gift, bequest, or other transfer of any Units, whether or not the transfer would be made (i) for value, or (ii) to another Owner, or (iii) voluntarily or involuntarily or by operation of law, or (iv) during an Owner's lifetime or upon an Owner's death.


	b.	Sale or Transfer Exception. The phrase "sale or transfer" does not include Owner's transfer into a self-settled trust for estate planning purposes.


2.	Permitted Voluntary Sale or Transfer During Lifetime. Any Owner who wishes to sell or transfer such Owner's Units must first provide written notice of such intent to each of the other Owners. Such Owner (a "Seller") shall be deemed to have offered to sell his/her Units (the "Offered Units") to the other Owners. The notice must state the name of the party (the "Third Party Purchaser") to whom the Seller wishes to sell or transfer the Offered Units and the terms of the proposed sale or transfer.

Permitted Voluntary Sale or Transfer During Lifetime. Any Owner who wishes to sell or transfer such Owner's Units must first provide written notice of such intent to each of the other Owners. Such Owner (a "Seller") shall be deemed to have offered to sell his/her Units (the "Offered Units") to the other Owners. The notice must state the name of the party (the "Third Party Purchaser") to whom the Seller wishes to sell or transfer the Offered Units and the terms of the proposed sale or transfer.


	a.	First Option to Other Owners. Each of the other Owners shall have thirty (30) days from the effective date of the notice during which such other Owners may elect to buy the Offered Units in proportion to their respective ownership of all outstanding Units (excluding the Offered Units) or in such other proportion upon which the other Owners may agree. During this 30-day period, the other Owners must collectively agree to buy all or none of the Offered Units. If the other Owners exercise their option to buy, then they shall acquire the Offered Units on the same terms and conditions as contained in the notice of the proposed sale or transfer, or the pre-determined purchase price as stipulated in Article II, whichever is lower. These terms shall be supplemented as necessary by the payment terms described in Article III below.

Permitted Sale or Transfer to Third Party Purchaser. If the other Owners do not validly exercise their option to buy all of the Offered Units within the 30-day period, then the Seller may complete the sale or transfer to the Third Party Purchaser.

may

Involuntary Lifetime Disposition/Termination of Employment. Any Owner with knowledge of a possible Involuntary Lifetime Disposition (defined below) must promptly provide written notice to each of the other Owners describing the nature and details of the Involuntary Lifetime Disposition, as well as each involved party (the "Third Party Transferee"). The Owner shall be deemed to have offered to sell such Owner's Units (the "Offered Units") to the other Owners.


	a.	Involuntary Lifetime Disposition. An "Involuntary Lifetime Disposition" occurs when an Owner's Units, or any portion or interest in them, are involuntarily sold, transferred or otherwise disposed of, or an involuntary sale, transfer or disposal is threatened by any third person, whether by (i) sale upon the execution or in foreclosure of any pledge, hypothecation, lien or charge, or (ii) acquisition of an interest in such Units by a trustee in bankruptcy or a receiver, or (iii) any other means (but not including the death of the Owner or any purchase by the Other Owners pursuant to the other sections of this Agreement), or (iv) court adjudication of Owner incompetency, or (v) the appointment of a guardian or conservator for an Owner (unless the Owner is a Disabled Employee, as defined below in Article I(4)(a), or (vi) a court order denying the Owner sole ownership of the Owner's Units in connection with a property division in a divorce proceeding.


	b.	First Option to Other Owners.

Termination of Employment. If any Owner is employed by the Company (an "Employee-Owner") and ceases to be an employee of the Company because the Employee-Owner is a Disabled Employee (see below), or for any other reason, then such Owner shall be deemed to have offered to sell all of his or her Units (the "Offered Units") to the Other Owners for the Purchase Price and on the Payment Terms described in Articles II and III below. Further, each other Owner shall agree to buy all of the Offered Units of the selling Employee-Owner in proportion to his or her respective ownership of all outstanding Units (excluding the Offered Units), or in such other proportion upon which the other Owners may agree. Such offer shall be deemed made on the date such Employee-Owner ceased to be an employee of the Company. This provision does not apply to early retirement as discussed below.


	a.	Disabled Employee. An Employee-Owner is a "Disabled Employee" when such person is (i) under a legal decree of incompetency, or (ii) eligible for benefits for more than 50% disability under any group or individual disability insurance policy (as confirmed by an insurance company), or (iii) unable to perform substantially all of his or her regular duties for a period which is reasonably expected to last at least 180 substantially consecutive days, as determined by an examining physician, to which examination each Employee-Owner hereby consents.


	b.	Early Retirement. If the Employee-Owner voluntarily retires prior to age years, or if the Employee-Owner has not given the Company at least five (5) years' prior written notice of his or her intention to leave the Company's employ, the Purchase Price shall be reduced by percent from the amount otherwise determined in Article II below.


5.	Death of an Owner.

Option of the Company. The other Owners shall have the option to transfer their collective purchase rights under sections 2, 3, 4, and 5 of this Article I to the Company. The Company shall be bound by the time periods set forth above, the purchase price provisions of Article II, and the payment provisions of Article III. The Company may acquire such amounts of life insurance on the lives of the Owners as it deems appropriate to enable it to purchase Offered Units. The option created under this paragraph may be exercised by a consent to transfer signed by Owners who hold at least percent of the outstanding Units.

Article - Purchase Price

The "Purchase Price" shall be determined in accordance with the provisions of this Article II, and the payment terms are set forth in Article III.

Article - Payment Terms

Type of Payment. The Purchase Price paid for the Offered Units of a deceased Owner shall be paid in to the extent of the face amount of the life insurance policies that any Owner buying such Units has maintained under Article V of this Agreement. The remaining portion of the Purchase Price shall be paid in However, at the option of each other Owner, the remaining portion may be paid in sixty (60) equal monthly installments of principal and interest. Such installment payments shall begin on the date of the closing and shall include interest compounded annually at the prime rate as listed in the Wall Street Journal on such closing date. Each other Owner shall give the Seller a negotiable promissory note as evidence of this debt. Such note shall permit the other Owner to prepay all or any part of the principal balance of the note at any time without penalty or premium. Payments shall first be applied to interest. In the event of an inter vivos transaction, the other Owners may exercise their option to buy the Offered Units from the Seller with a down payment of of the Purchase Price, with consecutive equal monthly installment payments for months, due and payable on the first day of each month following the exercise of this option by the other Owners, at a % rate of interest.

The Closing. The purchase of the Offered Units will take place at a closing at the Company's primary place of business or at any other place and time to which the parties agree. In the case of the death or voluntary retirement of the Seller, the closing shall be held 180 days after the date of the Owner's death or the effective date of retirement. In all other cases, the closing shall be held within thirty days after the date on which (i) the last option to buy is exercised or lapses, or (ii) the other Owners last become obligated to buy.


	a.


	b.	Power of Attorney. Each Owner hereby appoints as his or her agent and attorney-in-fact to execute and deliver all documents needed to convey his or her Units, if such selling Owner is not present at the closing. This power of attorney is coupled with an interest and does not terminate on the Owner's disability or death, and continues for as long as this Agreement is in effect, so long as the Owner was mentally capable of consenting, and consented, to the transaction, prior to their disability, incapacitation or death.


	c.	Death-Tax Liability. In the case of a sale because of the Seller's death, then notwithstanding any other provision of this Agreement to the contrary, payment for the Offered Units shall not be required until the Personal Representative of the Seller provides a release or other assurances to the reasonable satisfaction of the other Owners that the other Owners are protected from any liability for death taxes related to the Offered Units.


	d.	Escrow of Units. If any portion of the Purchase Price is evidenced by a promissory note, the certificate(s), if any, for such portion or all of the Offered Units shall be endorsed in blank, or accompanied by a duly executed, blank stock power, and delivered, in escrow, to an entity which customarily acts as an escrow agent. The escrow agent shall hold such documents as security for repayment of the promissory note. Upon notice from the other Owners that the promissory note has been paid in full, the escrow agent shall deliver all deposited certificate(s), if any, to the appropriate other Owners.

Article - Life Insurance

Required Policies. Each Owner will apply for, own, and be the beneficiary of one or more life insurance policies, one policy on the life of each other Owner. Each policy shall have death proceeds payable in an amount that is the greater of (i) the amount reasonably calculated to fully pay for such beneficiary-Owner's prorata share of the insured-Owner's Units at the Purchase Price, as if the insured-Owner died, or (ii) the amount listed on Schedule B. Each Owner will take any actions required to maintain in force all of the insurance policies that he or she is required to maintain under this Article, and will not cancel them or allow them to lapse without the prior written consent of each other Owner. All dividends on such policies shall be applied to the payment of premiums.


2.	Premiums. Each Owner must pay every life insurance premium required under this Article, and must give each other Owner proof of such payment within fifteen days of the premium due date. Upon failure to provide such proof, any other Owner may pay the premium and be reimbursed by the non-paying Owner.

Article - Terminating or Amending the Agreement

Termination. This Agreement will terminate if the Company is dissolved, put into receivership, or becomes bankrupt. Further, Owners who hold at least percent of the outstanding Units may agree in writing to terminate this Agreement. However, the Owners may not voluntarily terminate this Agreement to the disadvantage of any Owner whose Units have been offered (or deemed offered) for sale, but for which the closing date has not yet occurred.


2.	Amendment. This Agreement may be amended upon the written consent of Owners who hold at least percent of the outstanding Units. However, the Owners may not amend this Agreement to the disadvantage of any Owner whose Units have been offered (or deemed offered) for sale, but for which the closing date has not yet occurred.

Article - Continuation of Restrictions

This Agreement shall continue to apply to the Units which are the subject of a sale or transfer and to new Units issued by the Company. The transferee shall execute a counterpart signature page to this Agreement. Such signature shall be binding on all Owners and the Company as if the transferee was an original signor.

Article - Miscellaneous

Tax Status. If at any time the Company has elected a status for tax purposes that is valid only if the owners are individuals or other types of specified entities, then in order to protect such election, no Owner may sell or transfer any of his or her Units to any person if such sale or transfer might reasonably be expected to result in a termination of such election. No attempted sale or transfer in violation of this paragraph will be valid or recognized by the Company.


Binding Effect. This Agreement is binding on and enforceable by and against the parties, their successors, legal representatives, heirs, and assigns.


Governing Law. This Agreement will be governed by and construed according to the laws of the State of .

Severability. If any provision of this Agreement is held to be invalid or unenforceable for any reason, the remaining provisions shall continue to be valid and enforceable. If a court finds that any provision of this Agreement is invalid or unenforceable, but that by limiting such provision it would become valid and enforceable, then such provision shall be deemed to be written, construed, and enforced as so limited.


Notices. All notices required or permitted to be given under this Agreement must be given in writing, and will be deemed given when personally delivered or on the third day after mailing by U.S. registered or certified mail, postage prepaid, with return receipt requested. Notice to any Owner is valid if sent to him or her at such Owner's address as it appears in the Company's records.


Specific Performance. The Owners agree that the Units are unique and that the failure to perform the obligations under this Agreement will result in irreparable damage to the other parties. Further, the Owners agree that specific performance of these obligations may be obtained by a lawsuit in equity.


Waiver. Any party's failure to insist on compliance or enforcement of any provision of this Agreement shall not affect its validity or enforceability or constitute a waiver of future enforcement of that provision or of any other provision of this Agreement.


Entire Agreement. This Agreement constitutes the entire agreement of the Owners among themselves or with the Company regarding the subject matter of this Agreement and supersedes all prior agreements regarding such subject matter.


Effectiveness. This Agreement shall become effective when signed by all of the Owners listed on Schedule A and by on behalf of .


By:	Date:


By:	Date:

SCHEDULE A

List of Owners

SCHEDULE B

Name of Each Owner and Life Insurance Policy Amount


Name of Owner	Amount of Policy

Succession Plan FAQs

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How do I get a Succession Plan online?
It's very easy to document the terms of your agreement with a free Succession Plan template from Rocket Lawyer:
1. Make the document - Answer a few basic questions, and we will do the rest.
2. Send and share - Go over the document with the other party or get legal advice.
3. Sign and make it legal - Easily sign the agreement with RocketSign® electronic signatures.
This method is often notably less expensive than hiring and working with a traditional lawyer.
Why is a Succession Plan important?

Succession Plans are sometimes compared to estate plans or prenuptial agreements for businesses. A Succession Plan provides a roadmap for long-term success, ensures continuity, and may span several years to optimize tax efficiency when passing the business to the next generation. This is a reason to start a plan early: even if it changes later on, or dates get pushed back, a Succession Plan can also provide protection in case of an emergency.
When is the right time to make a Succession Plan?

It’s never too early to plan for who will run your business in the future. One reason is that things don’t always go as planned: if something bad happens, like getting sick, passing away, or going through a divorce, it’s important to have a plan so the business can keep going. Plus, you can update the plan as your goals or business change.

A strong Succession Plan starts with identifying and mentoring the individuals who may eventually take the lead. This could be trusted employees, family members, or friends. Training them now ensures smoother transitions later
What are the first steps a business should take to get ready to hand over leadership to someone new?

If you’re planning to pass your business on to someone else, a good first step is to take a close look at the financial health of your business. This includes determining how much your business is worth, what it owns, what it owes, and how much money it makes. Understanding these details will help you make informed decisions about the future.

You should also consider what you want both personally and professionally. It can be difficult to separate what’s best for you from what’s best for the company, but doing so can help you identify the right time to step away. Your personal goals might include when you’d like to retire, how you’ll provide for your family, health insurance coverage, and how taxes will affect you. You also need to think about whether you want the business to keep growing or if you want to still be involved even after someone else is in charge or the business is acquired.
What other steps can a business take to prepare for succession?
To prepare for transferring ownership or leadership—whether to a family member or as part of a sale—businesses can take several practical steps. These may include:
- Incorporate or form a limited liability company.
- Transfer assets, such as equipment or trademarks, to the business.
- Transfer real property to the business.
- Appoint a Power of Attorney.
- Train the new leadership.
- Discuss your plan with professional advisors.
A Legal Pro can explain your options along with the potential risks and consequences. A financial advisor can provide insight into tax planning, retirement preparation, and even help you build a transition budget to estimate the total cost of succession.
What decisions help make leadership changes easier?

Planning for new leadership involves making thoughtful decisions to ensure a smooth transition. Start by identifying people you trust to take on key roles in the company. If you don’t currently have someone in place, you may need to hire or train a successor. You should also consider strategies to retain current employees and maintain morale during and after the transition, even if the business is sold.

Intellectual property such as copyrights, trademarks, or patents may play a role in what you choose to sell or retain. A Buy-Sell Agreement, for instance, is one legal tool that can help protect your business. It outlines who is eligible to purchase your ownership stake, how the price is determined, and what happens to your share of the business when you exit.

Before any sale or leadership handoff, it’s important to know the true value of your business. If the business has unused or outdated assets, selling those first can help clarify its worth. Conducting a business valuation—an assessment of your business’s assets, liabilities, contracts, and market position—can be complex. Expert assistance can make the process easier and more accurate.
Can I change my Succession Plan?

Yes, Succession Plans can be updated. For small businesses, changes are usually straightforward. Even if a board of directors approved the original plan, it can often be revised. If you’ve started the transition process, review your Corporate Bylaws to confirm what decisions you’re still allowed to make.

Choosing the right successors early can make changes easier later. While passing on a business can be complex, thoughtful planning reduces stress and improves outcomes. With a clear vision for your future and your company’s, you’ll be better prepared for a smooth transition.

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- All owners and spouses.
- A representative for the company.
It is not necessary that the signatures be witnessed or notarized.

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You may want to talk to a lawyer about who should receive a copy of the signed document. If you sign this agreement online, a copy will be securely stored in your account. You can share your document from your account.
Important details
- Schedules A and B should remain attached to the final signed Succession Plan and all copies made.
- The Succession Plan will terminate in accordance with the provisions of Article VI or by the mutual agreement of the owners and the company.
Reasons to Update

To change the terms of the Succession Plan, such as the price, payment terms, method of funding, or events which trigger application of the agreement.