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Baby Boomer's retirement will create a huge wave of business transfers: CFIB

The retirement of "Children's boomers" will approach a huge transfer of business between the next five and ten years, but a small percentage of owners will be a formally written succession plan, according to the Canadian Independent Business Federation.

In a report released on Wednesday, CFIB suggests 47% of business owners with the intention of quitting the business with small and medium-sized companies (SMEs) within a period of five years and a quarter to fifty in 72 percent.

However, in the CFIB report only eight hundred of the eight origin surveyed said that the formally written inheritance plan. 51 percent had no plans and 41 percent had an informal plan.

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"While a good deal of business owners intends to start a new generation, the lack of formal planning leads to significant Canadian risk and competitiveness opportunities," said CFIB, a research analyst. Cruz.

"Actually changing $ 1.5 trillion of active assets over the next 10 years, Canada can not afford to prepare so many SME owners for this transition."

The CFI's conclusions are based on 2,507 small business inquiry surveys, conducted in May.

In five cases, retirement was mentioned as a reason for the planned departure of a company. Other reasons were for a business or non-profit business in a current company.

According to the surveyed 62 percent, sales of their businesses were based on a source of retirement income.

As CFIB said, formal strategic plans are developing the advantages of development with the contribution of professional advisers, a timetable and a conflict resolution process.

Similarly, it identifies several heirs to create an inheritance plan, such as a family member that does not have companies and businessmen who prefer to start a business start a new business rather than buying an existing business.

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"There are currently very few opportunities for those interested in buying a business in Canada to link their business with those that may have an exploration space," says the report.

Likewise, the government says that it changes the tax rules, when they are treated in the same way as family buyers not for business transfers for small businesses.

According to the current rules, the owner of the owner's business value is treated as a dividend sold to a family member and the profit capital is not sold to a family builder.

"Under the influence, these rules can decipher the transfer of a family family business, because the transaction does not have the right to life capital, due to the exception and, therefore, higher taxes."

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