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A Succession Agreement sets out how ownership and control of a business will transfer when key people leave, retire, or pass away. It's like a business continuity roadmap that protects both the company and its stakeholders under New Zealand company law.

These agreements typically detail who can buy shares, at what price, and under what conditions. They help prevent disputes, maintain business stability, and ensure smooth transitions - especially important for family businesses and professional partnerships in Aotearoa. The agreement often works alongside other key documents like shareholders' agreements and insurance policies to create a complete succession plan.

Business owners need a Succession Agreement most when building something meant to last beyond their direct involvement. This is especially crucial for family businesses, professional partnerships, and closely-held companies in New Zealand where ownership transitions can make or break the enterprise.

Put this agreement in place when your business is stable and relationships are good - not during a crisis. Key triggers include bringing on new partners, planning for retirement, expanding family involvement in the business, or when significant assets or intellectual property need protecting. The agreement becomes vital when owners have different ages, goals, or family situations that could affect business continuity.

• Succession Agreements in New Zealand commonly come in three main forms: Family Business Transfer agreements (focusing on generational handover and preserving family legacy), Partnership Exit agreements (detailing how professional partners can exit and transfer their stake), and Buy-Sell agreements (specifying share transfer mechanisms and valuation methods). Each type adapts standard elements like triggering events, valuation formulas, and funding arrangements to suit specific business needs.

• Business Owners: Initiate and sign these agreements to protect their legacy and ensure business continuity. This includes family business owners, professional partners, and shareholders in closely-held companies.
• Legal Advisors: Draft and review Succession Agreements to ensure compliance with NZ company law and effectiveness of transfer mechanisms.
• Successors: Future owners or leaders named in the agreement who will take over key roles or ownership stakes.
• Financial Advisors: Help structure funding arrangements and valuation methods for ownership transfers.
• Accountants: Assist with tax planning and financial implications of succession arrangements.

• Business Assessment: Document current ownership structure, key roles, and critical business assets.
• Stakeholder Details: Gather information about all owners, potential successors, and their desired roles in the transition.
• Valuation Method: Decide how the business will be valued during ownership transfers.
• Trigger Events: Define circumstances that activate succession (retirement, death, disability, voluntary exit).
• Funding Strategy: Plan how ownership transfers will be funded, including insurance policies or payment terms.
• Draft Review: Use our platform to generate a legally-sound agreement, then have all parties review and confirm understanding.

• Party Identification: Full legal names and roles of all current owners and designated successors.
• Transfer Triggers: Clear definition of events that activate succession (death, retirement, incapacity).
• Valuation Method: Specific formula or process for determining business value during transfers.
• Payment Terms: Structure and timing of payments for ownership transfers.
• Dispute Resolution: Process for handling disagreements under NZ jurisdiction.
• Exit Mechanisms: Procedures for voluntary departure or forced buyouts.
• Governing Law: Explicit statement that NZ law governs the agreement.

A Succession Agreement differs significantly from a Business Acquisition Agreement in several key ways, though both deal with business ownership changes. While a Succession Agreement plans for future transitions within an existing business structure, a Business Acquisition Agreement handles immediate, outright purchases of business assets or shares.

• Timing and Purpose: Succession Agreements are forward-looking plans for eventual leadership changes, while Business Acquisition Agreements execute immediate ownership transfers.
• Trigger Events: Succession Agreements activate upon specific events like retirement or death, whereas Business Acquisition Agreements take effect upon signing and closing.
• Relationship Structure: Succession typically involves internal transfers among known parties, while acquisitions usually involve external buyers.
• Payment Terms: Succession often includes gradual transitions with flexible payment structures, while acquisitions generally require more immediate settlement.