Business Succession Planning: The Strategic Role of Chartered Accountants and Creating Value beyond Compliance

Many Indian businesses are family-owned and operated. Statistics suggest that only a few such businesses (and the wealth created through them) survive and thrive for generations to come. Succession Planning thus becomes an important issue in the survival, maintenance and growth of businesses and wealth. The Author of this article highlights some of the critical aspects of Succession Planning and the role of Chartered Accountants in it. Succession Planning can become an attractive area for practice as CAs are trusted business advisors, are close to family members and have the skills to balance legal nuances with commercial acumen and feasibility.

INTRODUCTION

The Indian MSME sector, comprising over 63 million enterprises and contributing approximately 30 per cent to India's GDP, stands at a critical juncture. As the first-generation entrepreneurs of post-independence India start ageing, the question of business continuity and succession looms large. According to a 2021 survey on Indian Family Businesses, only about 30 per cent of family businesses survive to the second generation, approximately 13 per cent make it to the third generation, and merely 4 per cent survive beyond that.

These statistics become more alarming, considering their economic impact. The Credit Suisse Family 1000