Succession Agreement Template for United States

A Succession Agreement maps out how a business or organization will transfer leadership, ownership, and control when key people step down or pass away. In the Philippines, these agreements help family corporations and partnerships maintain stability during transitions, following rules set by the Corporation Code and Family Code.

The agreement details who takes over specific roles, how shares get distributed, and what happens to voting rights. It often includes special provisions for family businesses, like requirements for next-generation leaders to have certain qualifications or experience. Many Filipino companies use these agreements to prevent disputes and protect their business legacy across generations.

Create a Succession Agreement when starting or restructuring a family business in the Philippines, especially if multiple generations or siblings are involved. This proactive step prevents future ownership disputes and ensures smooth leadership transitions, particularly important under Philippine corporate governance rules.

The agreement becomes essential during major company milestones: bringing in new family members, planning retirement transitions, or expanding the business. Companies with aging founders, multiple stakeholders, or complex family dynamics need this document to protect business continuity and maintain harmony among family members while complying with local corporate regulations.

• Family Business Succession Agreements: Focus on transferring ownership and management within family members, often including specific training requirements and gradual transition periods
• Corporate Leadership Succession Agreements: Detail executive-level transitions in larger corporations, including interim management provisions and specific qualifications for successors
• Partnership Succession Agreements: Address changes in partnership structure, including buy-sell provisions and methods for valuing partnership interests
• Emergency Succession Agreements: Outline immediate transition procedures in case of sudden death or incapacity, common in Filipino SMEs
• Professional Practice Succession Agreements: Used by medical practices, law firms, and other professional services to maintain client relationships during ownership changes

• Business Owners/Founders: Initiate and shape the Succession Agreement to protect their legacy and ensure business continuity
• Family Members: Potential successors who must understand and agree to leadership transition terms and responsibilities
• Corporate Lawyers: Draft and review agreements to ensure compliance with Philippine corporate laws and family business regulations
• Board of Directors: Approve and oversee implementation of succession plans in larger corporations
• Business Consultants: Help identify suitable successors and structure transition plans that balance family dynamics with business needs

• Company Details: Gather current ownership structure, business registration documents, and corporate bylaws
• Successor Information: List potential successors with their qualifications, experience, and readiness for leadership roles
• Asset Inventory: Document all business assets, shares, and intellectual property for transfer planning
• Transition Timeline: Create a detailed schedule for leadership transfer, including training periods and milestone dates
• Stakeholder Input: Collect feedback from key family members and board members about succession preferences
• Legal Requirements: Review Philippine corporate governance rules and family business regulations for compliance

• Identification Section: Full legal names and roles of current owners, business entity details, and designated successors
• Transfer Terms: Specific conditions and timing for ownership/leadership transition, including trigger events
• Valuation Method: Clear formula or process for determining business value during transfer
• Training Requirements: Mandatory preparation and qualifications for successors under Philippine regulations
• Dispute Resolution: Procedures for handling disagreements, including mediation preferences
• Exit Provisions: Terms for voluntary withdrawal or removal of successors
• Governing Law: Explicit reference to Philippine corporate and family laws

A Succession Agreement differs significantly from a Business Acquisition Agreement in both purpose and timing. While both deal with ownership changes, they serve distinct needs in Philippine business law.

• Purpose and Planning: Succession Agreements focus on internal transitions, usually within families or existing leadership, planned well in advance. Business Acquisition Agreements handle immediate external purchases between unrelated parties.
• Timeline and Process: Succession plans typically involve gradual transitions with training periods and multiple stages. Acquisitions are usually one-time transactions with a clear closing date.
• Business Acquisition Agreement: Involves detailed due diligence, specific purchase prices, and comprehensive asset listings, while Succession Agreements emphasize leadership development and maintaining business continuity.
• Stakeholder Involvement: Succession Agreements typically include family members and existing management, focusing on preserving relationships. Acquisition deals primarily involve buyers, sellers, and their representatives.