FACT FINDER: OWNER PERSONAL INFO

Transcription

1 FACT FINDER: OWNER PERSONAL INFO Owner Information Owner Type*: Individual Individual + Spouse Entity, ESOP or Trust Name of Entity, ESOP or Trust: First Name Middle Name Last Name Age: Gender: Male Female Does Owner have Children? Children Name Age Relationship (Son, Daughter, Stepson, Stepdaughter) Is Child active in the business? 2016 Business Enterprise Institute, Inc. All rights reserved.

2 Spouse Information First Name Middle Name Last Name Age: Spouse Gender: Male Female Financial Information Average annual compensation, bonuses, distributions and dividends this Owner has received from all Companies over the past 3 years $ Total Gross Personal Assets $ Total Gross Personal Liabilities $ Total Annual Non-Business Income $ Personal Risk Does Owner have any personal responsibility or risk for business obligations and liabilities? Personal Guarantee Pledge of Security Interest in Personal Assets Other Other business obligations or liability 2016 Business Enterprise Institute, Inc. All rights reserved.

3 Financial Target Do you want to include a Financial Needs Analysis* Section in the Exit Plan for this Owner? If yes, who conducted the Financial Needs Analysis? If yes, Financial Needs Type: Annual Income Stream* Owner wants an annual income of a set amount (after tax and adjusted for inflation) Cumulative Total* Owner wants a lump sum (after tax) * For assistance in determining the above items, use the worksheet on the next page, The Financial Needs Analysis Worksheet. If yes, Total Financial Needs at Departure Date $ If yes, portion of Financial Needs that is expected from non-business assets $ We assume that Owner wishes to maintain control of the business until Owner attains financial security. Is that correct? 2016 Business Enterprise Institute, Inc. All rights reserved.

4 Financial Target Purpose The purpose of this worksheet is to request and record the results of an analysis of the resources required for the business owner named below to achieve/maintain personal financial security and the extent to which the business must support these financial security requirements. Complete the information requested below based on reasonable assumptions and conservative analysis in order to maximize the possibility that, if achieved, certain financial benchmarks will be most likely to lead to financial security. Business Owner Name Company: Date Completed: Anticipated Date of Final Separation from the Company (Departure Date): (i.e., estimated date after which the business owner will no longer benefit from the value or income of the Company) The following information is to be: Calculated as a cumulative lump sum as of the Departure Date, net of taxes Calculated as an annual income stream beginning at the Departure Date, net of taxes and adjusted for inflation WARNING: The Financial Needs Analysis reflected in this worksheet is not a formal assessment of an individual's financial security needs, nor is it a guarantee of achieving any of the objectives described here 2016 Business Enterprise Institute, Inc. All rights reserved.

5 Estate Planning Does Owner have an Estate Plan? If yes, complete Estate Plan Review. If yes, does Owner s estate plan or ownership agreement appropriately address who is to receive the business interest upon death? On a scale of 1-5 (5 being absolutely critical), Owner rates the importance of minimizing estate taxes upon death and death of spouse as: Estate Plan Review * Complete if answered Yes to Does Owner have an Estate Plan? When was Owner s estate plan last reviewed and updated? On a certain date: It has not been reviewed/updated since creation Unknown Does Owner wish to make any of the following changes to his/her estate plan? The personal representative The trustee The guardian The ages of the children at which they receive part or all of their trust inheritance held in trust Who is to own the business after owner s death Other: 2016 Business Enterprise Institute, Inc. All rights reserved.

6 Wealth Transfer Planning * Only complete if Owner has Children How does Owner feel about children receiving wealth from parents? It is a mistake to transfer too much wealth to children If selected, how much is too much? $ It is risky to transfer wealth to children when they are too young If selected, at what minimum age will a child typically be ready to hand the receipt of significant wealth? years It is important to teach children the philanthropic/charitable philosophy of the family There is no reason to be concerned about the ability of the children to handle the receipt of wealth Other: Does Owner want to evaluate options for making gifts (during lifetime) or bequests (at death) to anyone who is not a family member?, to charity/community organization(s) Please describe your estate planning goals related to charity/community organizations, to employees Please describe your estate planning goals related to employees, to individual(s) other than family or employees Please describe your estate planning goals related to employees 2016 Business Enterprise Institute, Inc. All rights reserved.

7 Charitable Giving Is Owner interested in charitable gifting upon any sale/transfer of the business? If yes, how would Owner like to carry out this charitable objective? Method of doing so is uncertain at this time Willing to to consider a CRT Does Owner feel that he/she has sufficient financial security to allow him/her to make gifts to community or charitable organizations during his/her lifetime? * Above question will only appear if Owner answered Yes, charity/community organizations to Owner want to evaluate options for making gifts (during lifetime) or bequests (at death) to anyone who is not a family member? Estate Planning Document Document Type Simple Will (no tax planning) A/B Will (tax planning) Disclaimer Will (tax planning) Revocable Trust Irrevocable Trust Charitable Remainder Trust Charitable Remainder Unitrust Charitable Remainder Annuity Trust Qualified Personal Residence Trust General Power of Attorney Medical Power of Attorney Special Power of Attorney Limited Power of Attorney Living Will HIPAA Authorization Joint Tendency Agreement Marital Agreement Other Property Agreement Other: Date of Execution 2016 Business Enterprise Institute, Inc. All rights reserved.

8 FACT FINDER: COMPANY OWNERSHIP SUMMARY Company Information Company Name Entity Type C Corporation S Corporation Limited Liability Company (LLC) General Partnership Limited Partnership Limited Liability Partnership Limited Liability Limited Partnership Sole Proprietorship State of Organization Year of Formation or Initial Operations Describe the entity s industry or operations Company Address Address 1 Address 2 City State Zip Code Country

9 Real Estate Describe the ownership of real estate on which the company operates Property is leased from an unrelated third party If leased from an unrelated third party, what year does the current lease term expire? Property is owned by owner(s) as individuals Property is owned by an entity that is in turn owned by owners Property is owned by the company Other: If not leased from an unrelated third party, what is the preferred future ownership of the real estate? Retain the real estate Sell the real estate Unknown at this time / Negotiable Current estimated value of the property? $ Year Purchased Is there a mortgage on the property?

10 Company Valuation Valuation $ Valuation Year * For assistance in determining the above items, use the worksheet on the next page, The Business Value Worksheet Valuation Method Appraisal Owner s estimate Net book value Capitalization of earnings Combination of methods Industry rule of thumb If other than Owner s estimate: Valuation Performed By Describe the role of the person/firm who performed the valuation An internal accountant An outside CPA An independent investment banker A business valuation specialist A business broker Other Is there a discounted value? If yes, Discounted Valuation $ If yes, Discounts Applied: Minority / Lack of control Lack of marketability Other

11 Business Value Worksheet Purpose The purpose of this worksheet is to request and record the results of an analysis of the estimated value associated with this business for planning purposes. The business value assessment described in this worksheet is combined with other information about the business and its owner's goals for the future of the Company in order to facilitate the design and implementation of planning techniques that are likely to support business owner objectives in a variety of areas. Complete the information requested below based on the business valuation / appraisal conducted for this business. Company: Date Completed: Target Successor Owner: Outside/Unrelated third Party Insider Co-Owner Insider Family Insider Employee(s) t Yet Known Comments: Request Business Valuation: Maximum business value Minimum (lowest defensible) value Range of value Marketability assessment (likelihood of successful third party sale) Other: Target Ownership Transfer Date: Planning Techniques That May Impact Business Value: Incentive compensation plan Unfunded deferred compensation obligation Unfunded salary continuation obligation Protection of business assets (tangible assets; intellectual property; operational risk) Other: Company Financial Statements Are: Compiled Reviewed Audited Results of Business Valuation / Appraisal: Current Value Future Value as of (specify date) Business Value or Range of Value for 100% of the Business: $ Discounted Value or Discount Rate to be Applied: $ or % Lack of Marketability Ownership Transfers May Include: Multiple Transactions n-controlling Interests Gifts or Bequests of Ownership Company's Unique Competitive Advantage: Lack of Control Value Drivers for this Business (i.e., the 5 critical areas that have the greatest ability to affect (increase) business value): WARNING: This worksheet is a summary sheet only. Valuation/appraisal information is contained in a separate report. The information summarized here does not guarantee the value of the business.

12 Potential Buyer Has the company been approached by any potential buyers? Name of Potential Buyer Date Potential Buyer Approached Company Method of Contact Financial History Average W-2 payroll of the Company over the past 3 years $ Average annual gross revenue of the company over the past 3 years $ Average annual free cash flow of the company over the past 3 years $ Does the company have any debt other than the typical operating liabilities? Do you want to include projected future annual cash flow in the Exit Plan? *If yes, use the worksheet on the next page, The Cash Flow Worksheet How many years would you like to include in cash flow projections? Retained Cash Flow % Estimated percentage of company cash flow that will be retained or set aside each year (for growth, contingencies, majority owner compensation or distributions, funding of pre-existing deferred compensation plans, etc.) or is otherwise unavailable for Exit Planning. If no retention is expected, input "0".

13 Cash Flow Worksheet Cash Flow in the Exit Planning context refers to the actual cash that is available for planning purposes in a given year. It is determined by starting with the Net Income of the Company, adjusting Net Income for any non-cash items that were included on the Income Statement. Include any amounts that the Company will set aside for retained earn- ings, contingencies and distributions to owners that must be satisfied before any other payments associated with the Exit Plan are made (e.g., the business owner always takes a minimum of $100k in a bonus or distribution each year and is not willing to make those funds available for the Exit Plan). Cash Flow is a pre-tax number, since the various uses of the cash may shift the tax consequences associated with it (i.e., deductible versus non-deductible payments, ordinary versus capital gain/loss treatment, and which party bears responsibility for payment of the taxes). What is the average annual gross revenue of your company over the past three years? $ What is the average annual free cash flow of your company over the past three years? $ Average compensation, bonuses, distributions and dividends to you over the past 3 years: $ CASH FLOW DETAILS Enter the first year for which you have cash flow projections: Enter the cash flow projection for Year 1: $ Year 2 Cash Flow Forecast Year 2 $ Year 3 Cash Flow Forecast Year 3 $ Year 4 Cash Flow Forecast Year 4 $ Year 5 Cash Flow Forecast Year 5 $ Year 6 Cash Flow Forecast Year 6 $ Year 7 Cash Flow Forecast Year 7 $ Year 8 Cash Flow Forecast Year 8 $ Year 9 Cash Flow Forecast Year 9 $ Year 10 Cash Flow Forecast Year 10 $ Estimated percentage of Company Cash Flow that will be retained or set aside each year (for growth, contingencies, majority owner compensation or distributions, funding of pre-existing deferred compensation plans, etc.) or is otherwise unavailable for Exit Planning (if no retention is expected, input 0 ): %

14 Financial Statements What is the current level of review for the company s current financial statements? Compiled Reviewed Audited Compiled - statements prepared based on internal Company accounting and record-keeping practices Reviewed - records and entries receive limited analysis from an accounting professional in order to create statements Audited - a CPA conducts a detailed analysis and review of the Company's financial and accounting entries to determine whether they are characterized correctly and reported accurately based on a specific set of auditing standards, and provides the Company with an opinion that the statements are in compliance with those standards. Financial Risk Are the company s tangible and intangible assets protected from creditors, claims, liabilities or misuse? Will this company experience any financial harm if any owner or employee is suddenly not available due to death or disability? If yes, is the risk adequately covered by existing key person insurance? Employees Number of Employees Is it important that current or future key employees participate in a formalized plan that will motivate, reward and retain them? Is the company interested in recruiting new key employees? If yes, does the company have sufficient incentive plans in place to attract new key employees?

15 Key Employees Name Job Title Gender Male Female Age Hire Date Current Salary $ Employee Aspirations: Ownership aspirations Financial aspirations Owner and Financial aspirations ne Other: Is there an Employment Agreement in place for this key employee at this time? Does this employee need to be motivated to remain with this company? Key Employees Name Job Title Gender Male Female Age Hire Date Current Salary $ Employee Aspirations: Ownership aspirations Financial aspirations Owner and Financial aspirations ne Other: Is there an Employment Agreement in place for this key employee at this time? Does this employee need to be motivated to remain with this company? Key Employees Name Job Title Gender Male Female Age Hire Date Current Salary $ Employee Aspirations: Ownership aspirations Financial aspirations Owner and Financial aspirations ne Other: Is there an Employment Agreement in place for this key employee at this time? Does this employee need to be motivated to remain with this company?

16 Key Employees Name Job Title Gender Male Female Age Hire Date Current Salary $ Employee Aspirations: Ownership aspirations Financial aspirations Owner and Financial aspirations ne Other: Is there an Employment Agreement in place for this key employee at this time? Does this employee need to be motivated to remain with this company? Key Employees Name Job Title Gender Male Female Age Hire Date Current Salary $ Employee Aspirations: Ownership aspirations Financial aspirations Owner and Financial aspirations ne Other: Is there an Employment Agreement in place for this key employee at this time? Does this employee need to be motivated to remain with this company? Key Employees Name Job Title Gender Male Female Age Hire Date Current Salary $ Employee Aspirations: Ownership aspirations Financial aspirations Owner and Financial aspirations ne Other: Is there an Employment Agreement in place for this key employee at this time? Does this employee need to be motivated to remain with this company?

17 Company Ownership Owner Name and Age Year of Initial Ownership in the Company Ownership of Company Ownership of Real Estate Voting Interest: % Non-Voting Interest: % Other Interest: % Description of Other Interest: Does the owner have any ownership interest in any real estate associated with the company? Percent of Real Estate Owned % Voting Interest: % Non-Voting Interest: % Other Interest: % Description of Other Interest: Does the owner have any ownership interest in any real estate associated with the company? Percent of Real Estate Owned % Voting Interest: % Non-Voting Interest: % Other Interest: % Description of Other Interest: Does the owner have any ownership interest in any real estate associated with the company? Percent of Real Estate Owned % Voting Interest: % Non-Voting Interest: % Other Interest: % Description of Other Interest: Does the owner have any ownership interest in any real estate associated with the company? Percent of Real Estate Owned % Voting Interest: % Non-Voting Interest: % Other Interest: % Description of Other Interest: Does the owner have any ownership interest in any real estate associated with the company? Percent of Real Estate Owned % Voting Interest: % Non-Voting Interest: % Other Interest: % Description of Other Interest: Does the owner have any ownership interest in any real estate associated with the company? Percent of Real Estate Owned %

18 Planning Owner: Business Involvement Average time spent working for this company hour(s) per week Planning Owner: Ownership Transfer How much of his/her ownership does Owner want to transfer during his/her lifetime? All Some If some, after the completion of any planned transfer, owner wants to retain what % of ownership interest in the company? ne Undecided Fixed Amount: % Range: From % to % Does owner know target dates to start and complete the transfer? - Transfer Start Date Transfer End Date Is it important to buy out any co-owner prior to Owner s planned transfer? Planning Owner: Successor Owner(s) - Lifetime Has the Owner identified a successor? If yes, Successor Options Child Key Employee Co-Owner Outside Third Party ESOP (Employee Stock Ownership)

19 Planning Owner: Business Continuity Upon death or disability, is there anyone who is capable and willing to manage the business? If yes, please see Planning Owner: Capable Persons area on following page How would the owner prefer to continue upon death or disability? Transfer interest to Family Member(s) If Transfer interest to Family Member(s) selected, Specify Family Member(s) Child Other Sell to Key Employee(s) If Sell to Key Employees is selected, Specify Key Employee(s): Sell to Co-Owner(s) If Sell to Co-Owner(s) is selected, Specify Co-Owner(s): Sell to Outside Third Party If Sell to Outside Third Party is selected, Specify Outside Third Party: Hold in Trust Liquidate Other: Planning Owner: Capable Persons Person(s) capable of running the business: Identify the individuals capable of running the business and owner's preferred method of motivating each person to stay with company through a transition period.

20 Planning Owner: Cash Expectation * If Outside Third Party is selected for Successor Options fill out the below information. Owner expects at least this purchase price from the same (for his/her ownership interest) $ Tax Obligations Based on the total expected value of Owner's ownership interest in the Company, provide baseline assumptions as to the minimum and maximum tax obligations that would result from the Owner's sale of all of his/her ownership interest in the Company. Minimum $ Maximum $ Planning Owner: Transaction Terms * If Outside Third Party is selected for Successor Options fill out the below information. Is Owner willing to accept another payment option besides 100% cash at closing? If yes, Payment options: % to % in cash at closing % to % in combination of owner employment compensation, covenant not to compete, consulting agreement % to % in Owner carry-back note (typically an installment note paid over 3 to 7 years) % to % in an earn-out based on the future performance of the company % to % in publicly traded securities % to % in equity in a non-public entity Planning Owner: Exit Bonuses Does Owner wish to provide a benefit (cash or other) to any employees when ownership is transferred?

21 Planning Owner: Controlling Interest Planning Owner: Conditions of Sale * If Outside Third Party is selected for Successor Options fill out the below information. Owner s departure is possible If we install key management Because key management is already in place It is important to Owner that buyer retains All of the employees The key management team Some of the employees If selected, identity one or more key employees to retain t a critical issue for Owner Planning Owner: Controlling Interest * If Child, Key Employee, or Co-owner is selected for Successor Options answer the below question. Will any successor have a controlling interest? Planning Owner: Transition Period * If Yes is selected in Controlling Interest answer the below question. Do any of the successor owners need assistance in developing their ownership skills?

22 Planning Owner: Departure Date Is the Owner s intention to work for the company indefinitely? If yes, does Owner want the ability to leave for extended periods of time? If no, what are the owner s intended departure dates: Owner wishes to begin his/her departure from the Company: Owner wishes to complete his/her departure from the Company: Planning Owner: Post Ownership Plan * If Owner does not wish to work indefinitely answer the below question. Has the owner decided how he/she will challenge himself/herself and/or stay active when he/she is no longer participating in the company on a regular basis? Describe the specific activities in which Owner will be involve after he/she leaves the company Planning Owner: Value, Tax and Risk Objectives Fair Market Value Owner wants to receive full Fair Market Value for company Owner wants to know Fair Market Value for the company but is willing to accept less in order to achieve other planning objectives If owner were to die prior to the implementation of a plan, what will the owner s family need from this company? Full Value Continued Income Full Value & Continued Income

23 Ownership Agreement Title Date of Origination Date last Reviewed The agreement was last updated Date is known: Unknown update has been preformed Parties to the Agreement: Summary of Agreement: Ownership Agreement Title Date of Origination Date last Reviewed The agreement was last updated Date is known: Unknown update has been preformed Parties to the Agreement: Summary of Agreement:

24 Employee Benefit Plan Type of Plan Non-Qualified Deferred Compensation Informal (Discretionary) Cash Bonus Plan Formal Cash Bonus Plan Eligible Participants Description of Plan [All Employees, Controlling Owner(s), Key Employees (including minority owners), Non-Key Employees] Description of Plan Stock Appreciation Rights Plan Phantom Stock Plan Stock Option Plan Stock Bonus Plan Company Vehicle 401(K) Pension Plan Other Retirement Plan Group Life Insurance Group Disability Insurance Other:

25 FACT FINDER: Ownership Agreement Title: Date of Origination: Date Last Reviewed: Date the Agreement Was Last Updated*: Date is Known Date is Unknown No Update Has Been Performed Parties to the Agreement (specify each individual party to the agreement): Summary of Agreement: 2016 Business Enterprise Institute, Inc. All rights reserved.

26 FACT FINDER: Employee Benefit Plan Additional Purpose/Description: 2016 Business Enterprise Institute, Inc. All rights reserved.

27 FACT FINDER: Insurance Policy Additional Purpose/Description: 2016 Business Enterprise Institute, Inc. All rights reserved.