Kowloon, Hong Kong S.A.R., January 18, 2014 --(PR.com
)-- Almost half (48%) of Chinese SME owners plan to pass their business onto their children. Just over one in eight (13%) plan to pass it onto their spouse. But the same amounts (13%) haven’t even thought about succession planning. Meanwhile, well over four in ten (45%) SME business owners don't have plans in place to extract profit from their business when they retire.
The independent survey of 837 employers found that 63% of SME owners aim to pass their business on to a family member when they retire, with 48% intending to hand the business down to their children. Over one in ten is preparing to pass their businesses onto their spouse.
However, the likelihood of an owner being succeeded by their children varied by industry. Those in the transport industry were most likely to pass on their business to the next generation, with three quarters (75%) stating this. Those in the wholesale and distribution industry are least likely to pass on their business, with 43% stating the same - below the national average.
Despite many owners planning to pass their business to the next generation, a significant proportion of small business owners don't have any plans for their succession in place at all, with over one in ten (13%) admitting they haven't thought about this yet.
This increases amongst business owners in the construction industry as over a quarter (26%) admitted to not thinking about plans for succession. Karl Mackintosh, Regional Head of Advice at The Tunstall Group, commented: "SMEs are the building blocks of the economy, and their longevity is crucial.
"Many are already multi-generation family businesses, but whether a company is newly formed, or centuries old, it's encouraging that the majority of SME owners plan to protect their business and its heritage, preparing children or family members to take over at the helm.
"We already know that only a third of family business make it to the second generation and succession can be a complicated process. There are tax implications of passing businesses to the next generation that business owners need to be aware of - whether capital gains tax, or inheritance tax - and beneficial reliefs like entrepreneur's relief or CGT Hold-over."
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