Each Entity must have a specifically stated date to dissolve and wind up business. The Entity can be extended (or dissolved earlier) by mutual agreement of the Participants, but this may be difficult to obtain in the future. Therefore, the founder(s) should specify a life likely to accomplish the intended business purpose(s) of the Entity and accommodate specific goals related to the business plan. (See your answers to the Questionnaire on Business Purpose).
Beneficiaries of the business purpose(s) and plan are primarily the owners of the business. In a discretionary Entity structure, these will primarily be the discretionary Participants, who do not have responsibility for the control or risk of the Controlling Participant, but do enjoy the benefits of profitability. Discretionary Participants (hereinafter, “beneficiaries”) can include:
• charities (including donor-advised funds and foundations established by the family),
• family members of different generations, and
• trusts for the benefit of family members- even generations not yet born.
Family members can be direct discretionary Participants, owning a discretionary Entity interest outright, and/or can indirectly benefit through ownership interests held by trusts of which they are beneficiaries.
Please consider the following: